Ontario court files class action lawsuit against Binance for crypto derivatives 😱

Ontario court files class action lawsuit against Binance for crypto derivatives 😱

Binance Facing Legal Action in Ontario

In a recent development, Ontario’s Superior Court of Justice has approved a class action lawsuit against Binance Holdings Ltd., a prominent name in the cryptocurrency trading sector. This legal action highlights alleged violations by Binance regarding the sale of crypto derivative products to retail investors without the necessary registration.

Binance in the Regulatory Crosshairs Once Again

The lawsuit claims that Binance’s actions were in breach of securities laws by not registering as required and failing to file a prospectus. Represented by Christopher Lochan and Jeremy Leeder, the plaintiffs argue that these sales are illegal and should be invalidated.

– Over 50% of Canadian crypto owners hold at least $5,000 worth of cryptocurrency.
– The Ontario Securities Commission (OSC) data highlights the significant presence of retail investors in cryptocurrency derivatives trading.
– The court’s decision to certify the class action brings attention to the potential merits of the plaintiffs’ case.
– Regulators have previously categorized crypto contracts as securities or derivatives, subjecting their marketing to securities law scrutiny.

Regulatory Concerns Surrounding Binance

Canadian regulators have been closely monitoring Binance’s dealings with local investors. Despite pledges to cease operations with Canadian investors in 2021 and agreements with the Ontario Securities Commission (OSC) in 2022, Binance remains under investigation for potential violations.

– Binance confronts regulatory challenges with U.S. derivatives regulators, facing fines exceeding US$2.7 billion.
– The company acknowledged breaching U.S. law in a separate legal case.
– Binance maintains that investors transacted directly with each other, absolving the platform of direct liability.
– The court dismissed this argument, asserting that investors engaged in direct trading with Binance.

User Implications of the Legal Battle

Those who acquired cryptocurrency derivative contracts from Binance starting from September 13, 2019, are part of the class action. The outcome of this legal dispute could significantly impact the cryptocurrency sector, offering insights into evolving regulatory frameworks and the obligations of key industry players like Binance.

Bitcoin’s Reaction to the News

The news concerning Binance’s legal challenges led to a decline in Bitcoin’s value, with BTC dropping below $66,000 and trading at $65,998 on the Binance platform.

Exploring Crypto Regulations

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