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Binance Faces Class-Action Lawsuit for Alleged Securities Violations

Plaintiffs in Canada have filed a class-action lawsuit against Binance for allegedly violating securities regulations by offering crypto derivative products to retail investors without proper registration.

Introduction

A recent class-action lawsuit in Canada has accused Binance, a major cryptocurrency exchange, of breaching Canadian securities laws by providing crypto derivative products to retail investors without the necessary registration. The plaintiffs have taken legal action to seek damages and halt the illicit trading activities.

Main Points

The lawsuit, certified by Ontario’s Superior Court of Justice on April 19, alleges that Binance promoted crypto derivatives in a manner that contravened federal laws and the Ontario Securities Act. Christopher Lochan and Jeremy Leeder, representing the plaintiffs, highlighted the violations committed by Binance in offering these products to Canadian investors without proper authorization.

According to the plaintiffs, tens of thousands of Canadians engaged in trading crypto derivatives through Binance’s platform, with a significant portion of Canada’s cryptocurrency owners participating in this market. Binance, a leading global cryptocurrency exchange, commands a substantial share of spot trading volumes and operates one of the largest derivatives markets compared to other exchanges like Bybit and OKX.

Data from Bybit indicates that Binance, OKX, and Bybit dominate the derivatives market for centralized exchanges, with Binance being a key player in driving trading volumes in the cryptocurrency space. The lawsuit against Binance comes in the wake of the exchange’s decision to cease operations in Ontario following regulatory warnings from the Ontario Securities Commission.

Conclusion

The legal action against Binance underscores the growing scrutiny faced by cryptocurrency exchanges regarding compliance with securities regulations. The allegations of unauthorized trading in crypto derivatives highlight the need for regulatory oversight and accountability in the cryptocurrency market.

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