Crypto giant Binance Holdings Ltd. has received another legal rebuke from an Ontario court, as it seeks to launch arbitration proceedings in Hong Kong against investors in Ontario that are pursuing a class action against the firm.
In 2024, the Ontario Superior Court of Justice certified a proposed investor class action against Binance, which alleges that the company violated securities law in Ontario by trading crypto derivatives without being registered or issuing a prospectus.
The allegations have not proven, as the class action has not been heard in court yet, and has faced a string of legal challenges from the firm.
First, Binance appealed the certification decision to the Ontario Court of Appeal, and lost, and then it was denied leave to appeal that decision to the Supreme Court of Canada.
In the meantime, it launched arbitration proceedings in Hong Kong against investors involved with the class action in Ontario. The investors then obtained an injunction from the Ontario court, ordering the company not to pursue the arbitration case, on the basis that this breached the Ontario courts’ previous rulings.
Now, according to the court’s latest decision, the company attempted to seek authorization from the courts in Hong Kong to pursue the arbitration case anyway. However, the courts in Hong Kong rejected that motion, and Binance then returned to the courts in Ontario seeking direction on obtaining an injunction in Hong Kong so that it can go ahead with the arbitration case.
“[Binance and its affiliates] are determined to pursue arbitration in Hong Kong despite their setbacks, and, having run out of alternative avenues, have returned to this court asking for directions on how to do it,” the court noted — adding, “… [they] seem to have difficulty taking ‘no’ for an answer.”
According to the court, Binance wants to get the arbitration proceedings started quickly in Hong Kong, before the Ontario Court of Appeal hears its appeal of the injunction barring it from pursuing that arbitration case.
It’s expected that appeal won’t be heard until late 2026, it said.
“As a result, the Canadian [injunction] is likely to remain in effect for a considerable period, and there is no immediate prospect of the arbitration being able to resume absent relief from the Hong Kong courts,” it said.
The court said that Binance was right to be cautious in seeking direction from the courts in Ontario, rather than taking action that would breach the injunction, and risk more serious sanctions.
“This court is not generally in the business of giving anticipatory legal advice to parties contemplating breaching one of its orders. I will say, however, that where a mandatory injunction and its potential breach is concerned, caution is always an advisable course,” it said.
And, the court ruled that continuing to push the arbitration case would breach the injunction.
“To ask whether they may pursue a step … leading to arbitrations from which they are specifically and explicitly barred is, frankly, to pose a question that answers itself. But in case it is not clear to all concerned, the answer is: No, they may not,” the court said.
The court also sought to reiterate a prior warning to Binance against attempting to circumvent the rulings of the Ontario courts, noting that a previous ruling — which ordered $261,900 in costs against the crypto firm — had “discouraged” it from utilizing abusive legal tactics.
“Apparently, that language was not strong enough to get the message across, so let me reiterate: [Binance] and any other entity or person that might act on their behalf, shall not seek, pursue, or take any steps that advance the goal of pursuing arbitrations against the plaintiffs,” the court said.