By Raymond Ronson
May 17th, 2024
BURLINGTON, ON
In recent years, we’ve seen cryptocurrency exchanges become one of the biggest players in the finance sector due to the huge growth they’ve experienced. One of the most recognizable names of these exchanges is Binance. This crypto exchange became a global powerhouse due to the vast range of services it offers its millions of users.
Binance exchange became a global powerhouse due to the vast range of services it offered.
Despite that success, Binance has found itself facing a class action lawsuit that was granted by the Ontario Superior Court. We’ll be discussing that lawsuit in this article and how its outcomes might affect Canadians who use crypto.
Currently, Canadians are using crypto exchanges like Binance to acquire crypto for various purposes with many mainly using crypto as an investment that they can buy and hold on to. There’s another large cohort of people in Canada who use crypto for transactions such as buying gift cards, playing online casino games like crash and slots, and donating to good causes.
Many Canadians are active traders on platforms like Binance and spend their time trying to profit from crypto price fluctuations using strategies like arbitrage trading and swing trading. These are only some of the uses of crypto that have benefited many Canadians who will be keen on seeing how the Binance case ends and what it will mean for crypto exchanges, and them. Now, let us get into the details of the case.
As things stand, Binance has been brought to trial on charges that the company engaged in market manipulation, fraudulent practices, and contravened securities laws in Canada.
The Ontario Superior Court has certified the lawsuit as a class action so the affected parties can collectively seek compensation from Binance. By doing so, the court has acknowledged the commonality of the claims that have been brought to the company and highlighted a need for an efficient resolution to the case.
If found guilty, Binance will face huge financial penalties that will affect the company’s market standing and reputation. Other implications include operational changes as Binance may have to revise its practices to prevent future legal challenges. For Binance’s subsidiaries, their regulatory compliance may come into question, and their operations could be impacted as well.
The Ontario Superior Court has certified the lawsuit as a class action. Photo credit: KATRIN BOLOVTSOVA
Another big implication is that this case is going to ensure that all crypto operations are as heavily regulated as real money online casinos to protect consumers in Canada. However, this shouldn’t be bad news for consumers as they can check if the crypto services they use are registered with the Financial Transactions and Reports Analysis Centre of Canada (FINTRAC). Having this registration means that the service provider you’re using is compliant with anti-money laundering and counter-terrorist financing regulations.
To stay safe, consumers can also research the compliance practices of the service providers they’re considering. Additionally, crypto consumers can ensure that their service providers are following basic compliance procedures like record-keeping, due diligence, and reporting obligations. By doing that, they will always be on the safer side regardless of what may happen during the Binance case.
