Key takeaways:
- Canadian class-action lawsuits against crypto exchange Binance are rising, with the plaintiffs claiming the company broke regional securities rules.
- Christopher Lochan and Jeremy Leeder claim that Binance offered cryptocurrency derivatives products in breach of both federal and Ontario securities laws.
Canadian class-action lawsuits against crypto exchange Binance are rising, with the plaintiffs claiming the company broke regional securities rules.
The class-action case against Binance, which claims the company offered cryptocurrency derivative products to retail investors without registering, has a certification motion published by Ontario’s Superior Court of Justice on April 19.
Christopher Lochan and Jeremy Leeder, the plaintiffs’ solicitors, claim that Binance offered cryptocurrency derivatives products in breach of both federal and Ontario securities laws.
The complaint seeks damages and the retraction of illegal derivatives dealings. According to the plaintiffs, tens of thousands of Canadian users of the Binance website allegedly invested in the company’s crypto derivatives products.
The certification motion notes that a significant number of ordinary investors are involved in cryptocurrency derivatives trading and that the Ontario Securities Commission (OSC) reports that over 50% of Canadian cryptocurrency owners have at least $5,000 invested in the market.
As of March 2024, Binance, a significant international cryptocurrency exchange, accounts for 58% of all spot trading volumes across all centralized exchanges. In addition to being the market leader for spot cryptocurrency trading, Binance runs the largest derivatives market when compared to other exchanges such as Bybit and OKX.
Based on data from Bybit, Binance, OKX, and Bybit virtually “entirely dominate” the derivatives market for centralized exchanges (CEXs).
The most recent class action lawsuit against Binance was filed a couple of years after the cryptocurrency exchange declared in June 2021 that it would be shutting down its business in Ontario as a result of an OSC warning to the company. The court document reads:
“As a result of its failure to adhere to this announced cessation of sales, in early 2022, the OSC notified the defendants of its intention to seek a cease trade order,”
Local authorities have not let up on their crackdown on Binance, even after the exchange declared its intention to leave Canada in May 2023. The court’s motion stated as follows:
“The OSC’s investigation into the defendants is ongoing,”
Nadeem Anjarwalla, a dual-citizen Kenyan who works for cryptocurrency exchange Binance, was allegedly detained in Kenya after leaving Nigeria in March. In response to claims that the exchange had manipulated the naira, the country’s fiat currency, he and colleague Binance executive Tigran Gambaryan made their first trip to Nigeria in February.
