Binance, the largest cryptocurrency exchange in the world, is leaving the Canadian market citing regulatory tensions as the cause.
On Friday, Changpeng Zhao, Binance’s CEO and founder, indicated the reason was due to the new guidance on stablecoins and proposed investor limits.
In February, the Canadian Securities Administrators (CSA) issued new guidance stating that crypto asset trading platforms in Canada are not allowed to let customers purchase or deposit stablecoins without prior approval from the CSA. To obtain approval, these platforms need to successfully pass several due diligence checks conducted by the CSA.
Under the new rules set by the CSA, companies are not allowed to allow Canadian clients to engage in crypto contracts involving the purchase or sale of any crypto asset categorized as a security or derivative. Additionally, stablecoins have been classified as securities according to the defined guidelines.
Canada has recently implemented stricter regulations for crypto asset trading platforms, including the introduction of a pre-registration process. Companies failing to comply with these new rules may face enforcement action, according to the Ontario Securities Commission.
Binance expressed its disagreement with the newly imposed regulations but remains hopeful about collaborating with Canadian regulators to establish a comprehensive regulatory framework for cryptocurrencies.
Unfortunately, today we are announcing that Binance will be joining other prominent crypto businesses in proactively withdrawing from the Canadian marketplace.
We would like to thank those regulators who worked with us collaboratively to address the needs of Canadian users.…
— Binance (@binance) May 12, 2023
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Binance tells Canadian users to close positions
The company also issued an email to its Canadian users, directing them to close their existing positions by September 30, 2023. The email also cautioned that starting in October, Canadian customers would be restricted to a liquidation-only mode.
Prior to the change, Binance had been operating in all Canadian provinces and territories, except Ontario. However, in March 2022, Binance decided to withdraw from Ontario due to an extended disagreement with the province’s regulators.
Earlier this year, OKX withdrew from the Canadian market, followed by decentralized exchange dYdX in April, and subsequently by blockchain fintech Paxos.
In March, California-based cryptocurrency exchange Kraken submitted the new preregistration undertaking and expressed its dedication to remaining operational in Canada. The CSA has also provided a list of 11 platforms that are “Authorized to Do Business with Canadians.” A few of these include CoinBerry, Netcoins, and Wealthsimple Digital Assets.
Binance founder and CEO Changpeng Zhao, who more commonly goes by CZ, is Canadian.
Follow Joseph Morton on Twitter
joseph@mugglehead.com
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