Canadian investors accused Binance of violating the securities law

They demanded that crypto derivatives transactions be canceled and compensation be paid

23.04.2024 - 11:10

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2 min

What’s new? The Supreme Court of the Canadian province of Ontario has issued an interim ruling in a class action lawsuit against Binance, accusing the exchange of selling crypto derivatives without registration, which is a violation of the Securities Act. The plaintiffs allege that the transactions are illegal and invalid in the absence of Binance’s registration and are seeking rescission and damages.

Material by Finance Feeds

What else is known? The court recognized that cryptocurrency contracts are considered securities under current law. This decision paves the way for the assessment of damages and the amount of compensation, with all investors who bought crypto derivatives on Binance since September 13, 2019, having the right to join the lawsuit.

The court rejected Binance’s argument that it only facilitated transactions between investors because the contracts were bought directly through the exchange.

Earlier, Ontario’s lower courts found that Binance was available to Canadian users. In mid-2021, it pledged to stop providing services to local investors and later began winding down operations in Ontario.

However, weeks before the shutdown, Binance refused to honor that commitment, stating that its money services authorization allowed it to continue operating in the province.

US court refuses to recognize the secondary sale of cryptocurrencies on Coinbase as securities trading

The decision concerns an investor class action lawsuit dated March 2022

The Ontario Securities Commission’s (OSC) ongoing investigation into possible misconduct by Binance, which began in 2023, has not yet resulted in formal charges.

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