- Binance provided crypto derivative products to retail investors without registration as per plaintiffs.
- Legal action is being taken to recover damages and to stop the illegal derivatives trading.
Plaintiffs in a new class-action lawsuit in Canada are claiming that Binance, a cryptocurrency exchange, has broken Canadian securities rules.
On April 19, the certification motion for the class-action lawsuit against Binance was published by Ontario’s Superior Court of Justice. The lawsuit claims that Binance provided crypto derivative products to retail investors without registration.
Alleged Securities Violations
Christopher Lochan and Jeremy Leeder, who were representing the plaintiffs, said that Binance promoted crypto derivatives products in a way that violated both federal law and the Ontario Securities Act (OSA).
Legal action is being taken to recover damages and to stop the illegal derivatives trading. Tens of thousands of Canadians, according to the plaintiffs, used Binance’s website to buy crypto derivatives products.
More than half of Canada’s cryptocurrency owners have at least $5,000 in the market, according to the Ontario Securities Commission (OSC), and the certification motion states that many retails investors are crypto derivatives traders.
As of March 2024, 58% of the overall spot trading volumes among centralized exchanges were accounted for by Binance, a prominent cryptocurrency exchange on a worldwide scale. In addition to being one of the most prominent spot crypto trading venues, Binance also runs the largest derivatives market in comparison to other exchanges such as Bybit and OKX.
Data from Bybit indicates that Binance, OKX, and Bybit “almost entirely dominate” the derivatives market for centralized exchanges (CEXs).
Binance has been the target of a class action lawsuit in recent years; the exchange stated in June 2021 that it would be ceasing operations in Ontario after a warning from the Ontario Securities Commission (OSC).
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