Binance, a major player in cryptocurrency trading, is in trouble – yes, again!
Now, it is facing a significant legal challenge as Ontario’s Superior Court of Justice has given the green light to a class action lawsuit against Binance Holdings Ltd. The lawsuit alleges that Binance violated securities laws by selling crypto derivative products to retail investors without proper registration.
Represented by Christopher Lochan and Jeremy Leeder, the plaintiffs argue that these sales were illegal and should be nullified because Binance failed to register as required by securities law or to file a prospectus.
The certification motion highlights the large presence of retail investors in cryptocurrency derivatives trading. According to the Ontario Securities Commission (OSC), over 50% of Canadian crypto owners hold at least $5,000 worth of cryptocurrency.
While none of the allegations have been proven, the court’s decision to certify the class action emphasizes the potential strength of the plaintiffs’ case. Regulators have previously classified crypto contracts as securities or derivatives, bringing the marketing of such contracts under securities law.
Regulators are closely examining Binance’s history with Canadian investors. Despite pledges to stop doing business with local investors in 2021 and agreements with the Ontario Securities Commission (OSC) in 2022, Binance is still under investigation for possible violations.
In the U.S., Binance is also facing regulatory consequences, with derivatives regulators seeking fines and disgorgement exceeding US$2.7 billion. Binance has admitted to violating U.S. law in a separate legal case.
And we haven’t even begun to talk about their troubles in Nigeria, Philippines, and Hong Kong.
Also Read: Philippines SEC Warns Public, Blocks Binance from Google, Apple App Stores
The Ontario class action raises questions about Binance’s relationship with its users. Binance argues that investors transacted with each other, absolving the platform of direct responsibility. However, the court disagreed, stating that investors traded directly with Binance.
Investors who purchased cryptocurrency derivative contracts from Binance starting on Sept. 13, 2019, are now part of the class action. The outcome of this legal battle could have significant implications for the cryptocurrency industry.
Also Read: BNB Price Turns Bullish! Binance Coin To Hit $700 This Month?
Curious about how crypto laws and regulations impact blockchain technology and cryptocurrencies like Bitcoin? Read HERE.
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