Binance faces lawsuit alleging breach of securities laws in Canada

A group of Canadian investors has initiated a class action lawsuit against Binance. Allegations put forward by the plaintiffs suggest that Binance has breached securities laws.

Binance faces lawsuit alleging breach of securities laws in Canada

Representatives Jeremy Leeder and Christopher Lochan, acting on behalf of the plaintiffs, have stated that Binance sold crypto derivatives products to retail users without the requisite licence.

The plaintiffs assert that the majority of traders affected were retail customers. Data from the Ontario Securities Commission (OSC) indicates that over 50% of crypto owners possess at least 5000 Canadian dollars in the market.

The investors are seeking recompense from Binance for incurred losses and demand the immediate cessation of illicit operations involving derivatives. It is claimed by the plaintiffs that tens of thousands of Canadians used the Binance website to buy crypto derivatives.

On May 10, 2023, Canadian regulators initiated proceedings against Binance over suspected violations of securities market regulations, including trading without proper registration, dissemination of misleading information, and offering products without meeting regulatory requirements.

Two days later, on May 12, 2023, Binance announced the cessation of its operations in Canada due to heightened regulatory scrutiny in the crypto market. Despite expressing hopes for a return and restoration of unrestricted access to digital assets for Canadian residents, the investigation into the exchange remains ongoing.

Following Binance’s decision, other key players in the crypto industry, such as OKX and Paxos, also announced their withdrawal from the Canadian market. Conversely, Coinbase expanded its presence in Canada.

Earlier, Binance secured a comprehensive licence to work as a Virtual Asset Service Provider (VASP) in Dubai.

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