Binance To Halt Operations In Canada Due To Regulatory Hurdles

On May 12, Binance announced on Twitter that it would leave the Canadian market. Citing the continued effects of new regulations issued by Canadian regulators on the country’s cryptocurrency business, Binance said that the move was proactive.

Binance has decided to leave the Canadian market, joining a number of its smaller competitors in doing so. This decision was made in response to new rules that the Canadian Securities Administrators (CSA) implemented on February 22. The CSA asked bitcoin exchanges to comply with extra rules and submit new pre-registration commitments.

According to reports, Binance had just made a new preregistration commitment. But the company was very explicit in a tweet that…

“Unfortunately, new guidance related to stablecoins and investor limits provided to crypto exchanges makes the Canada market no longer tenable for Binance at this time.”

Companies are not permitted to allow their Canadian clients to participate in cryptocurrency contracts incorporating securities or derivatives, under the most recent Canadian Securities Administrators (CSA) regulations. Stablecoins have also been classified as a sort of security under these regulations.

According to a message sent by Binance to its Canadian users, which was reviewed by Cointelegraph, the exchange has directed them to close any outstanding positions by September 30, 2023. It has cautioned that from October 1st of the same year, Canadian customers will only have access to a liquidation service. The exchange also made an additional statement;

“While we do not agree with the new guidance, we hope to continue to engage with Canadian regulators aimed at a thoughtful, comprehensive regulatory framework.”

What You Might Have Missed

On February 22, the Canadian Securities Administrators imposed stronger registration rules for cryptocurrency exchanges in reaction to the chaos seen in 2022.

The notice describing new standards that crypto asset trading platforms (CTPs) must satisfy in order to register in Canada was published by the Canadian Securities Administrators (CSA).

These restrictions forbid a number of things, including the purchase or deposit of Value Referenced Crypto Assets (commonly known as stablecoins) through crypto contracts without the CSA’s prior written approval. The stablecoin USD Coin, however, does not appear to have been influenced by this decision.

Following this development, in March, OKX left the Canadian market. The decentralized exchange dYdX and the blockchain fintech Paxos came after it in April.

Similarly, Binance had a presence in all Canadian provinces and territories with the exception of Ontario. However, in March 2022, Binance decided to pull out of Ontario after a prolonged dispute with the province’s regulatory authorities.

Is all hope lost for Canadians?

However, all is not lost for Canadian cryptophiles. Kraken pledged to remain in Canada when it filed the new preregistration undertaking in March.

11 platforms are listed by the CSA as being “Authorized to Do Business with Canadians.”

Conclusion

As regulators around the world scrutinize cryptocurrency exchanges’ operations and compliance with local laws more closely, this decision may have broader repercussions for the cryptocurrency community. The business may become more transparent and secure as a result of increased scrutiny and governmental monitoring, but this might also stifle innovation and constrict consumer access to services associated with cryptocurrencies.