Binance, a prominent cryptocurrency exchange, faces a fresh class-action lawsuit in Canada. The plaintiffs claim that the company breached local securities regulations.
On April 19, Ontario’s Superior Court of Justice disclosed a motion seeking certification for a class-action suit against Binance. The lawsuit asserts that Binance unlawfully marketed crypto derivative products to individual investors without proper registration.
The plaintiffs, represented by Christopher Lochan and Jeremy Leeder, argue that BinaBinance’sions contravene the Ontario Securities Act (OSA) and federal statutes.
However, the lawsuit aims to obtain compensation and invalidate illegal derivatives trades. According to the plaintiffs, tens of thousands of Canadian users of the Binance website invested in its cryptocurrency derivatives offerings.
The certification motion highlights that many cryptocurrency derivatives traders are retail investors. It cites the Ontario Securities Commission (OSC), which states that over 50% of Canadian crypto owners have invested at least $5,000 in the market.
Binance stands out as a dominant force in the global cryptocurrency exchange arena, commanding 58% of total spot trading volumes among centralized exchanges as of Mar 2024. It holds the top spot for spot crypto trading, and Binance also leads in the derivatives market, surpassing competitors like Bybit and OKX.
Binance Dominates Derivatives Market
Moreover, Based on statistics provided by Bybit, the derivatives trading scene within centralized exchanges (CEXs) is overwhelmingly led by Binance, OKX, and Bybit, with these platforms holding a significant market share.
The most recent class action against Binance follows a few years after the crypto exchange declared in June 2021 its intention to stop operations in Ontario following a warning from the OSC.
The latest court document states that “despite announcing the cessation of sales, Binance’s faced consequences as the OSC notified defendants in early 2022 of its intention to seek a cease trade order.”
Even after Binance’s announced its departure from Canada in May 2023, local authorities have continued cracking down on the exchange. However, the court motion reveals that “The OSC’s investigation into the defendants is ongoing.”
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