In a significant legal development, Ontario's superior court has granted permission for a class action lawsuit against Binance, a prominent crypto exchange, to proceed. The lawsuit, initiated by Christopher Lochan and Jeremy Leeder, alleges that Binance unlawfully sold unregistered crypto derivative products, thereby violating securities laws in Canada.

According to the plaintiffs, Binance purportedly sold crypto derivative products to numerous retail traders without adhering to the requisite registration procedures mandated by the Ontario Securities Commission. The lawsuit contends that this failure to comply with regulatory requirements has potentially harmed thousands of Canadian users who engaged in cryptocurrency transactions through the Binance platform.

Following a certification of motion granted on April 19, the lawsuit has been authorized to proceed as a class action, enabling Lochan and Leeder to represent a broader group of individuals without each party having to initiate separate legal proceedings. Judge E.M. Morgan acknowledged the plaintiffs' assertion that they are among the many Canadian users who invested in cryptocurrency products on Binance's platform, allegedly in violation of securities laws.

In approving the lawsuit, Judge Morgan emphasized the existence of common issues among the class members, indicating that the plaintiffs had provided sufficient evidence to demonstrate the shared nature of the legal questions raised in the case. The plaintiffs are seeking damages for the crypto trades conducted on Binance's platform and are also seeking to rescind their contracts with the exchange.

However, Binance has contested the plaintiffs' claims, arguing against the appropriateness of rescission and asserting that it merely serves as a third party in the transactions between users. Despite Binance's argument, the court dismissed the exchange's stance, highlighting its failure to produce any pertinent contracts supporting its position.

Judge Morgan remarked on the absence of contracts supporting Binance's contention that users on its platform enter into agreements with each other, with Binance acting solely as an intermediary. The court's decision underscores the importance of transparency and compliance with regulatory standards in the cryptocurrency industry, particularly concerning the sale of derivative products and adherence to securities laws.