Ontario’s Superior Court of Justice has certified a
class action lawsuit against Binance, according to a report by Advisor.ca. The lawsuit
alleges that Binance Holdings Limited violated securities law by offering
crypto derivative products to retail investors without proper registration.
This latest development occurs amid increasing scrutiny from
regulatory authorities, including the Ontario Securities Commission (OSC). In 2021, Binance promised to cease operations with Canadian investors in response to the OSC’s scrutiny and later agreed to an undertaking with the OSC to halt
trading activities in Ontario.
However, the OSC‘s investigation into possible
regulatory breaches by the exchange is ongoing, with no formal allegations yet
made against the company.
The court noted that regulators have previously
categorized crypto contracts as securities or derivatives, suggesting that the
marketing of such contracts falls under securities law. This classification
paves the way for the plaintiffs’ claims of violation of securities law against
Binance.
Moreover, the court dismissed Binance’s argument that
it was merely a facilitator of trades between users, highlighting evidence that
investors traded directly with Binance.
Investors who purchased cryptocurrency derivative
contracts from Binance starting September 13, 2019, are considered members of
the class affected by the lawsuit. The case highlights the importance of
regulatory compliance and investor protection in the rapidly evolving cryptocurrency trading landscape.
Binance Faces Regulatory Pressure in Canada
Last year, Binance terminated its operations in Canada due
to stringent regulations, particularly concerning stablecoins. Canada’s
regulations regarding cryptocurrencies took a new turn when the
Canadian Securities Administrators classified stablecoins as “securities
and/or derivatives”.
This action barred regulated crypto exchanges from offering
services involving stablecoins, a significant component of the crypto market.
Additionally, the province of Ontario mandated the registration of all
cryptocurrency exchanges operating within its jurisdiction.
Binance, acknowledging the evolving regulatory landscape,
cited the new guidance related to stablecoins and investor limits as the main
reason for its exit from the Canadian market. The exchange emphasized that the
regulatory environment in Canada had rendered its operations untenable.
Binance is not alone in its departure from Canada. Other
prominent crypto exchanges, including Paxos and OKX, have opted to end their
services for Canadian users due to regulatory pressure. However, exchanges such
as Gemini, Coinbase, and Kraken are actively seeking authorization to
strengthen their presence in the region.
Ontario’s Superior Court of Justice has certified a
class action lawsuit against Binance, according to a report by Advisor.ca. The lawsuit
alleges that Binance Holdings Limited violated securities law by offering
crypto derivative products to retail investors without proper registration.
This latest development occurs amid increasing scrutiny from
regulatory authorities, including the Ontario Securities Commission (OSC). In 2021, Binance promised to cease operations with Canadian investors in response to the OSC’s scrutiny and later agreed to an undertaking with the OSC to halt
trading activities in Ontario.
However, the OSC‘s investigation into possible
regulatory breaches by the exchange is ongoing, with no formal allegations yet
made against the company.
The court noted that regulators have previously
categorized crypto contracts as securities or derivatives, suggesting that the
marketing of such contracts falls under securities law. This classification
paves the way for the plaintiffs’ claims of violation of securities law against
Binance.
Moreover, the court dismissed Binance’s argument that
it was merely a facilitator of trades between users, highlighting evidence that
investors traded directly with Binance.
Investors who purchased cryptocurrency derivative
contracts from Binance starting September 13, 2019, are considered members of
the class affected by the lawsuit. The case highlights the importance of
regulatory compliance and investor protection in the rapidly evolving cryptocurrency trading landscape.
Binance Faces Regulatory Pressure in Canada
Last year, Binance terminated its operations in Canada due
to stringent regulations, particularly concerning stablecoins. Canada’s
regulations regarding cryptocurrencies took a new turn when the
Canadian Securities Administrators classified stablecoins as “securities
and/or derivatives”.
This action barred regulated crypto exchanges from offering
services involving stablecoins, a significant component of the crypto market.
Additionally, the province of Ontario mandated the registration of all
cryptocurrency exchanges operating within its jurisdiction.
Binance, acknowledging the evolving regulatory landscape,
cited the new guidance related to stablecoins and investor limits as the main
reason for its exit from the Canadian market. The exchange emphasized that the
regulatory environment in Canada had rendered its operations untenable.
Binance is not alone in its departure from Canada. Other
prominent crypto exchanges, including Paxos and OKX, have opted to end their
services for Canadian users due to regulatory pressure. However, exchanges such
as Gemini, Coinbase, and Kraken are actively seeking authorization to
strengthen their presence in the region.