Binance exits Canada despite “sentimental value”
Canada’s recent moves to impose stricter rules on digital asset trading platforms prompt Binance, the world’s biggest crypto exchange, to cease its operations in the country.
Binance stated in a tweet on Friday that the new guidance issued for cryptocurrency exchanges in Canada, which relates to stablecoins and investor limits, has made it “no longer tenable” for the company to operate in the country.
“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. Albeit a small market, it held sentimental value for us as the home country of our founder,” Binance wrote on Twitter.
Several prominent exchanges, including OKX and dYdX, have rethought their presence in Canada due to the regulatory uncertainty that has plagued the crypto business in the country. It has created challenges for crypto businesses seeking to comply with various rules and requirements across different jurisdictions. As a result, some companies have chosen to limit their operations or focus on more crypto-friendly regions.
Previously, Binance was under fire from a Canadian provincial regulator for allegedly violating Ontario securities law. The industry’s giant opted to pull out of Ontario, rather than comply with securities law or face regulatory scrutiny.
The recent move comes as Canada’s financial regulator is rolling out a coordinated oversight regime for cryptocurrency activities. Now, all crypto trading platforms seeking registration are obliged to sign undertakings to comply with investor protections.
The new rules will also make it more difficult for retail investors to trade cryptocurrencies using leveraged bets.
The Canadian Securities Administrators (CSA) plans to strengthen its oversight of cryptocurrency exchanges operating in the country. As part of a basket of new registration requirements, crypto applicants will have to agree to tighter rules, including a ban on margin and leverage trading.
Additionally, the proposal prevents crypto providers from accepting payments via credit cards and requires them to keep customer assets segregated from their own operational funds.
These measures also include suggestions that providers should be forced to hold all Canadian clients’ assets “with an appropriate custodian and segregate these assets from the platform’s proprietary business.”
To continue operating while their application is being processed, cryptocurrency platforms must give their primary regulator a pre-registration undertaking. By making these commitments, the crypto exchange acknowledges that its platform is bound by terms and conditions that address investor protection issues.
If a cryptocurrency trading platform is unable to file an undertaking or does not adhere to its requirements, CSA members may seek legal action.
