A new legal battle hits Binance, the popular cryptocurrency exchange, in Canada. Plaintiffs accuse Binance of breaking local securities laws, sparking a class-action lawsuit.
Ontario’s Superior Court of Justice revealed a motion on April 19, alleging Binance sold crypto derivative products to retail investors without proper registration. Plaintiffs, represented by Christopher Lochan and Jeremy Leeder, argue Binance violated the Ontario Securities Act and federal law.
The lawsuit seeks damages and rescission of unlawful derivative trades. Plaintiffs claim thousands of Canadian users invested in Binance’s cryptocurrency derivatives products.
The motion highlights that many retail investors are involved in cryptocurrency derivatives trading. More than half of Canadian crypto owners reportedly have over $5,000 in the market, according to the Ontario Securities Commission (OSC).
Binance’s Market Dominance
Binance holds a significant position in the global cryptocurrency exchange market, accounting for 58% of total spot trading volumes among centralized exchanges as of March 2024. It also boasts the largest derivatives market compared to competitors like Bybit and OKX.
Data from Bybit indicates that Binance, OKX, and Bybit dominate the derivatives market for centralized exchanges (CEXs).
Past Warnings and Actions
Binance’s legal troubles in Canada aren’t new. In June 2021, the exchange announced plans to cease operations in Ontario after a warning from the OSC. However, the OSC continued its investigation, even after Binance’s departure announcement in May 2023.
Despite Binance’s efforts to leave the Canadian market, the OSC’s investigation into the exchange remains ongoing, indicating persistent regulatory scrutiny.
