Binance Sued in Canada: Ontario Court Files Class Action Lawsuit Over Crypto Derivatives

The post Binance Sued in Canada: Ontario Court Files Class Action Lawsuit Over Crypto Derivatives appeared first on Coinpedia Fintech News

Binance is facing yet another regulatory scoop! In a recent landmark decision, Ontario’s Superior Court of Justice has given the green light to a class action lawsuit against Binance Holdings Ltd., a major player in the world of cryptocurrency trading. 

The lawsuit alleges Binance violated securities laws by selling crypto derivative products to retail investors without proper registration. Represented by Christopher Lochan and Jeremy Leeder, the plaintiffs claim that these sales were illegal and should be voided due to Binance’s failure to register as required by securities law or to file a prospectus.

The certification motion highlights the significant presence of retail investors in cryptocurrency derivatives trading. It notes that over 50% of Canadian crypto owners hold at least $5,000 worth of cryptocurrency, according to the Ontario Securities Commission (OSC).

While none of the allegations have been proven, the court’s decision to certify the class action underscores the potential viability of the plaintiffs’ case. Regulators have previously classified crypto contracts as securities or derivatives, placing the marketing of such contracts under the purview of securities law.

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Specifically, regulators are interested in Binance’s troubled history with Canadian investors. Despite promises to stop doing business with local investors in 2021 and deals with the Ontario Securities Commission (OSC) in 2022, Binance is still being investigated by regulators for possible violations.

Meanwhile, Binance faces regulatory repercussions with U.S. derivatives regulators for over US$2.7 billion in fines and disgorgement. The company admitted to violating U.S. law in a separate legal case.

However, the class action in Ontario raises questions about the nature of Binance’s relationship with its users. Binance argued that investors transacted with each other, absolving the platform of direct responsibility. However, the court dismissed this argument, asserting that investors traded directly with Binance.

User’s in Trouble? 

The investors who purchased cryptocurrency derivative contracts from Binance starting on Sept. 13, 2019, are now included in the class action. The outcome of this legal battle could have far-reaching implications for the cryptocurrency industry, shedding light on the evolving regulatory landscape and the responsibilities of major players like Binance.

The news’s effect caused BTC to dip below $66,000, trading at $65,998 on the Binance.

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