Court Refuses To Enforce 'All-But-Inaccessible' Arbitration Agreement For Crypto Trading Platform

The Ontario Superior Court's decision in Lochan v. Binance Holdings Limited¹ demonstrates that Canadian courts will refuse to enforce an arbitration agreement where such an agreement is contrary to public policy and unconscionable. In this case, the arbitration agreement had particularly extreme circumstances including being cost prohibitive and all but inaccessible to potential claimants and allowing for multiple unilateral changes to the agreement by the company.

Factual background

Binance Holdings Limited (Binance) is the world's largest crypto trading platform. The Ontario Superior Court previously confirmed that from 2019 until early 2022, Binance sold crypto derivatives products to Canadians without filing a prospectus.² In June 2022, the plaintiffs commenced a proposed class action pursuant to section 133 of the Ontario Securities Act (OSA), which provides purchasers with a right of action for recission or damages against a company selling securities for