Canadian Court of Appeal Rules Ontario Securities Commission's Document Request to Binance 'Excessively Broad' and Unconstitutional

In a recent development, the Ontario Court of Appeal in Canada ruled in the case of 'Binance Holdings Limited v. Ontario Securities Commission (OSC)' that the OSC's extensive document request to Binance was 'shockingly broad' and violated Section 8 of the Canadian Charter of Rights and Freedoms regarding 'unreasonable search and seizure'.

The court noted that while participants in capital markets have lower privacy expectations in regulated activities, they are still protected by the Charter. The OSC had previously requested Binance to submit 'all internal and affiliate communications related to Canada over a two-and-a-half-year period', a request deemed by the court to be beyond reasonable regulatory purposes.

The ruling emphasized that regulatory investigations can be conducted without evidence of wrongdoing, but must be limited to 'document categories reasonably related to the investigation purpose', otherwise they can be rejected by the court.

Furthermore, the court commented on Binance's use of encrypted communication tools like Signal for 'automatic message deletion', stating that the mere use of such technology is not sufficient to infer an intent to 'evade regulation', providing a significant clarification for financial institutions using privacy communication software.

This judgment is seen as establishing the boundaries of Canadian securities regulatory authority and reminds companies that they can assert privacy and due process rights granted by the Charter when facing cross-border or excessively broad investigation requests.

Related Articles