Binance Faces New Class-Action Lawsuit in Canada Over Alleged Violations

Another legal fight is waiting for cryptocurrency exchange giant Binance in Canada. Ontario’s Superior Court of Justice has recently been made aware of a certification motion for a class-action suit against the platform. The plaintiffs represented by Christopher Lochan and Jeremy Leeder make a claim that Binance violated local securities laws by selling crypto derivative products without adequate registration.

Plaintiffs Accuse Binance of Selling Crypto Derivatives Without Registration

The lawsuit, made public on April 19, alleges that Binance violated the Ontario Securities Act (OSA) and federal law by offering derivative products to retail investors without the required permission. This unauthorized activity caused Canadian users of the platform to suffer significant financial damage, and instead seek the damages and the rescission of unlawful trades.

The striking factor of this case is the very large number of retail investors that are involved. As noted in the motion for certification, a number of traders of crypto derivatives are retail investors, with the Ontario Securities Commission’s (OSC) data showing that over 50 percent of Canadian crypto owners have invested at least $5000 in the market.

This lawsuit represents another section of the long story of the confrontation between Binance and the Canadian authorities. Binance had published in June 2021 that it was going to cease all operations in Ontario after being warned by the OSC. Nonetheless, the plaintiffs claim that Binance did not comply with this announcement causing the further scrutiny by the regulators.

Notwithstanding Binance’s announcement of its exit from Canada in May 2023, the local authorities continue to pursue their investigations. “But the OSC’s investigation into the Defendants is continuing,” states the court motion, which implies that the regulatory pressure on Binance does not sooth.

The recent lawsuit reflects the rising regulatory pressure on the cryptocurrency exchanges worldwide. While regulators aim to enforce the prevailing securities legislations in the fast-changing crypto environment, Binance type of exchanges is walking into a maze of legal issues.