In its recent decision in Binance Holdings Limited v. Ontario Securities Commission, 2025 ONCA 751, the Ontario Court of Appeal has clarified the limits of the Ontario Securities Commission’s (the OSC) powers under the Securities Act to require production of documents and the Charter protections available to entities responding to regulatory inquires.
Background: Binance’s Ontario Operations
In 2021, the OSC informed Binance, a Cayman Islands based online crypto platform, that it was contemplating enforcement proceedings because Binance has failed to register as a dealer under new guidance issued by the CSA. In response, Binance gave assurances to the OSC that it had put in place restrictions to prevent Ontario residents from using its platform.
That turned out to be untrue: Ontario users continued to use the Binance platform. As a result, in 2023, the OSC issued an investigative order under s. 11 of the Securities Act. In connection with the investigation, it issued a summons under s. 13 of the Securities Act demanding extensive document production, which extended to, among other things, requests for revenue data, account information and internal communications, including all communications across various platforms including Signal, WhatsApp, Telegram and Slack among “directors, officers, employees, contractors, agents and consultants of Binance Holdings Limited and related entities” (the Summons).
Binance’s Challenge: Jurisdiction and Constitutionality
Binance challenged the Summons as impermissibly overbroad and constitutionally deficient in multiple forums:
- Binance filedan application with the Capital Markets Tribunal to revoke the investigative order and summons under section 144(1) of the Securities Act which provides the OSC “may make an order revoking or varying a decision of the [OSC].” The Tribunal found it did not have the jurisdiction to make this order, which lay with the OSC alone.
- Binance filed an application for judicial review with the Divisional Court. The Divisional Court denied the judicial review application and declined to hear Binance’s Charter arguments, reasoning that Binance had not sought an alternative remedy from the OSC.
- Binance filed an application directly with the OSC under s. 144(1) of the Securities Act itself to revoke or vary the summons. The OSC also found it did not have the jurisdiction to do so.
Binance appealed the decision of the Divisional Court denying judicial review, and the OSC’s decision directly to the Court of Appeal.
The Court of Appeal’s Decision: A Partial Win for Binance
In allowing the appeal in part, the Court of Appeal held that while Binance did not have a constitutional right to a pre-compliance challenge of the Summons, the Summons was overbroad and violated s. 8 of the Charter.
OSC Cannot Revoke or Vary a Summons Issued by an Investigator
The Court of Appeal held that the OSC does not have jurisdiction under section 144(1) to revoke or vary a summons issued by an appointed investigator. The power to issue a summons under section 13 lies with the investigator, not the Commission itself and therefore does not constitute a “decision of the Commission”.
No Constitutional Right to Pre-Compliance Challenge
Where state agents undertake a “search” or “seizure” that may compromise an individual’s reasonable expectation of privacy, section 8 of the Charter will apply. Section 8 demands three requirements:
- The search and seizure be authorized by law.
- The law itself must be reasonable.
- The search or seizure must be carried out in a reasonable manner.
Binance argued that it had a constitutional right to challenge the Summons pursuant to s. 8 of the Charter before being required to comply with it. The Court of Appeal rejected that argument, finding that there was no free-standing right in the regulatory context to challenge a Summons prior to being required to comply with the order.
At the same time, the Court of Appeal found that, on the particular facts, the Summons was overbroad and violated s. 8 of the Charter because it (a) demanded “all communications” without limitation to inquiry-specific events and activities of interest; (b) required production from every person who might have managed or undertaken work not only at Binance but all of its “related entities”; and (c) sought communications concerning not just Ontario, where its jurisdiction lies, but concerning Canada at large, whether or not Ontario was referenced.
As a result, even where there is a “very low expectation of privacy”—such as in a regulatory investigation—the compelled production of documents and information is limited to terms that are fair and reasonable.
Key Takeaways
- A request for documents by a securities regulator including an investigator must be reasonable and relevant to an inquiry. Investigators must demonstrate a “reasonable foundation” when issuing a section 13 summons. The practice of broad demands for production of documents and request for written answers without appropriate limitations and parameters may no longer be an acceptable practice for a section 13 summons.
- Notwithstanding the recognized relatively low expectation of privacy for business records for companies engaged in trading securities, Charter protections apply to summonses issued by investigators appointed by the OSC. While in some instances protections may be limited in the regulatory context, protection of respondents’ rights in such investigations remains important in light of serious consequences that can result.
- Courts should not deny judicial review solely based on the existence of an alternative remedy. If a remedy is inadequate or practically unavailable, judicial review remains an appropriate avenue to challenge regulatory actions.
Looking Ahead
As regulatory scrutiny of crypto platforms increases, this decision provides important guidance on the procedural safeguards available to market participants and the limits of regulatory authority. It also underscores the need for clear internal compliance protocols and legal strategies when responding to investigative demand given the serious consequences that can result.
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