Law360 Canada ( December 13, 2024, 1:14 PM EST) -- Appeal by appellant from the order of the motion judge dismissing its motion for a stay of proceedings in favour of arbitration. The appellant operated the world's largest cryptocurrency trading platform. It sold cryptocurrency derivatives to Canadians through its website. However, the motion judge found that cryptocurrency derivatives contracts were novel, complex, and risky securities, presenting investor protection concerns. The appellant did not register with the Ontario Securities Commission or seek an exemption from registration. The appellant did not file a prospectus for any of its securities offerings. The respondents were representative plaintiffs who commenced a proposed class action. The claim was based on the Ontario Securities Act which provided purchasers with a right of action for rescission or damages against a company selling securities for failure to file or deliver a prospectus. The statement of claim proposed a class defined as everyone in Canada who purchased cryptocurrency derivatives from the appellant. The appellant moved to stay the proceeding based on contract agreed to by users of the Binance website requiring that any disputes be resolved by arbitration. The respondents argued that the contract for the sale of cryptocurrency derivatives was illegal because the appellant never filed a prospectus and that it rendered the arbitration clause void ab initio. The motion judge dismissed the appellant’s motion, finding that a stay in favour of arbitration should be refused because the arbitration clause was void both as contrary to public policy and because it was unconscionable. The appellant argued that the motion judge erred in holding that the arbitration clause was contrary to public policy without first considering whether an exception to the competence-competence principle applied....