Binance Withdraws from Canada, Citing Regulatory Concerns
- Leading crypto exchange Binance has announced that it will be winding down operations in Canada due to regulatory concerns.
- The exchange said that it is “confident” that it will re-enter the Canadian market at a later date in the near future.
- The Canadian Securities Administrators (CSA) issued new crypto rules and gave firms a 30-day time period to comply.
- Decentralized exchange dYdX and blockchain firm Paxos also announced their respective withdrawals from Canada.
- Crypto exchange Gemini stated that it had signed a pre-registration undertaking with the OSC and plans to get regulated in Canada.
The world’s largest crypto exchange, Binance, continues its attempts to expand operations worldwide and boost its trading volume amid the market slump. Interestingly, major economies around the globe are still hesitant when it comes to licensing crypto companies following the multi-billion dollar collapse of crypto trading platform FTX. As per a new announcement, the exchange founded by Changpeng Zhao, also known as CZ in the crypto industry, will be withdrawing operations from Canada due to the country’s new crypto rules.
Canada recently implemented new rules regarding crypto assets, and as a result, many crypto companies are now ending operations in the country due to unsuitable regulatory conditions. Binance announced on May 12 that it will be leaving Canada via its official Twitter account and called its withdrawal “proactive” as the new rules haunt crypto firms in the world’s second-largest country by total area.
On Feb. 22, the Canadian Securities Administrators (CSA) issued new rules for crypto firms that seek registration in the country. The new rules require these companies and crypto exchanges to sign pre-registration undertakings (PRUs), which will be legally binding documents. Only after signing PRUs can exchanges be authorized in the country, and thereafter, they will report to their principal regulatory body, which will oversee the company’s compliance process.
The CSA explained that crypto trading platforms or CTPs “are prohibited from permitting Canadian clients to enter into crypto contracts to buy and sell any crypto asset that is itself a security and/or a derivative. […] Staff are of the view that Fiat-Backed Crypto Assets generally meet the definition of ‘security’ and/or would meet the definition of ‘derivative’ in several jurisdictions.”
On the other hand, Binance did file a pre-registration undertaking, according to a report from Bloomberg, but, in the Twitter post, it explained:
“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. We put off this decision as long as we could to explore other reasonable avenues to protect our Canadian users, but it has become apparent that there are none.”
In February, the CSA gave a 30-day period for the existing companies operating in Canada to sign the PRUs and register themselves with their respective regulators. The new rules also defined stablecoins as securities.
The customers of the leading crypto exchange that are based in Canada were sent emails regarding the future steps that they need to follow. Binance further added that it is “confident” that it will “someday return to the market when Canadian users once again have the freedom to access a broader suite of digital assets.”
It is important to mention here that, recently, popular decentralized exchange dYdX also announced that it will be winding down its operations in Canada due to regulatory issues. Moreover, blockchain infrastructure platform Paxos also confirmed its withdrawal from the region and planned to “re-enter the Canadian market in cooperation with the Ontario Securities Commission (OSC) at a future date.”
On the contrary, prominent crypto exchange Gemini, which recently established a regional hub in Gurgaon, India, announced that it had filed a pre-registration undertaking with the Ontario Securities Commission and has plans to get licensed in the region.
A crypto journalist with over 3 years of experience in DeFi, NFT, metaverse, etc. Parth has worked with major media outlets in the crypto and finance world and has gained experience and expertise in crypto culture after surviving bear and bull markets over the years.
