Cryptocurrency exchange Binance is facing a new class-action lawsuit in Canada, with plaintiffs alleging violations of local securities laws. The Ontario Superior Court of Justice published a certification motion on April 19 for the lawsuit, which accuses Binance of selling crypto derivative products to retail investors without proper registration.

The plaintiffs, represented by Christopher Lochan and Jeremy Leeder, claim that Binance sold these derivative products in violation of the Ontario Securities Act and federal law. The lawsuit seeks damages and rescission of unlawful trades. It highlights that a significant number of Canadian users invested in Binance’s cryptocurrency derivatives products.

The motion emphasizes the prevalence of retail investors in cryptocurrency derivatives trading, citing statistics from the Ontario Securities Commission indicating that over 50% of Canadian crypto owners have at least $5,000 invested in the market.

Binance holds a prominent position in the global cryptocurrency exchange landscape, accounting for a significant portion of spot trading volumes among centralized exchanges. Additionally, it operates a substantial derivatives market, which is dominated by Binance, OKX, and Bybit, according to data from Bybit.

This legal action follows Binance’s announcement in June 2021 of plans to cease operations in Ontario after receiving a warning from the OSC. Despite this announcement, the OSC notified Binance in early 2022 of its intention to seek a cease trade order due to continued sales activities. Even after Binance announced its departure from Canada in May 2023, regulatory scrutiny from local authorities has persisted, with the OSC’s investigation into the exchange ongoing.