A class action lawsuit has been filed against Binance in Canada. A group of investors claims the exchange violated local securities laws.
The plaintiffs, represented by Christopher Lochan and Jeremy Leader, allege that the platform sold cryptocurrency derivatives to retail users without proper registration.
The investors have demanded compensation from Binance and an end to the illegal trading of derivative instruments.
According to the plaintiffs, the majority of derivative traders on the platform were retail clients. More than 50% of these users had balances of less than 5000 Canadian dollars (~$3650).
In March 2022, Binance committed to the Ontario Securities Commission to cease operations in the Canadian province.
On May 10, 2023, the regulator launched an investigation into the exchange regarding potential circumvention of market legislation requirements, as stated in the lawsuit.
The alleged violations may include:
- trading securities without registration;
- offering products without meeting prospectus requirements;
- misleading statements.
On May 12, Binance announced its exit from Canada. The investigation against it continues.
The country’s authorities have increased scrutiny of crypto exchanges following the collapse of FTX in November 2022.
Subsequently, several major industry players like OKX and Paxos announced their departure from Canada. In contrast, Coinbase has expanded its presence.
In November 2023, a survey revealed that the number of users in the country regretting their cryptocurrency investments rose from 68% to 77%.