Background: Canadian investors filed a class action against Binance, alleging it sold cryptocurrency derivatives without filing a required prospectus, violating the Ontario Securities Act.

Issue: Binance sought to stay the lawsuit in favor of arbitration per its website’s terms of use. The motion judge denied this request, leading to Binance's appeal.

Arguments:

• Binance relied on the “competence-competence” principle, which generally allows arbitration tribunals to determine their own jurisdiction.
• The plaintiffs argued that the arbitration clause was unconscionable and contrary to public policy, justifying the Ontario court’s jurisdiction.

Court’s Decision:

• The Court of Appeal upheld the lower court’s decision, finding exceptions to the competence-competence principle applied, based on precedents like Dell Computer Corp. and Uber Technologies Inc..
• The arbitration clause was deemed unconscionable because:
  • Users had to agree to it within seconds when opening accounts.
  • Binance repeatedly changed the forum and governing law, eventually choosing Hong Kong with prohibitive costs (~$36,000 CAD).
• These barriers effectively denied access to justice for small investors, rendering the clause void for public policy reasons.

Outcome: The appeal was dismissed, and the class action can proceed in Ontario courts. Binance was ordered to pay $30,000 in costs to the plaintiffs/respondents.