TechFlow news: The Ontario Superior Court of Justice in Canada has initiated a class-action lawsuit against cryptocurrency exchange Binance, accusing it of selling crypto derivatives to retail investors without registration, thereby violating securities laws.
This is not the first time Binance has faced trouble in Canada; for several years it has been locked in disputes with provincial regulators. The lawsuit seeks compensation and cancellation of these transactions, alleging that Binance’s operations failed to comply with required registrations and prospectus filings mandated by securities laws.
In certifying the class action, the court stated that under current regulations, crypto contracts are considered securities or derivatives, and their marketing constitutes distribution.
Although subject to regulatory scrutiny by the Ontario Securities Commission, Binance committed in mid-2021 to halt trading with Canadian investors and began winding down its operations in Ontario in early 2022. Prior to fully withdrawing from Ontario, however, Binance retracted its commitment, claiming its authorization as a money services business allowed it to continue operating in the province.
The court rejected Binance's argument that it merely facilitated transactions between investors rather than directly participating. The ruling paves the way for assessing damages, interest, and costs in the class action, making all investors who purchased Binance crypto derivative contracts since September 13, 2019, eligible to join the lawsuit.
