Binance exits Canada after imposition of new crypto rules – Investor Bites

SNEAK PEEK

• Binance has announced its exit from Canada owing to new regulations on investor limits and stablecoin.
• Canadian Securities Administrators’ new rules prevent companies from letting Canadian clients step into crypto contracts.
• North American regulators have increased their investigation on Binance during the past year.

Binance has chosen to exit from Canada, thanks to the execution of new guidelines for crypto exchanges. The new regulations come with restrictions on investors and demand exchanges to register with authorities. 

Canada has imposed stricter regulation in recent months as far as trading platforms engaged with crypto assets are concerned. This also includes the launch of a pre-registration process.

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

As a result of the rules released by the Canadian Securities Administrators on February 22, which mentioned the need for pre-registration agreements and enhanced limitations, Binance has opted to depart from the Canadian market, a path already chosen by its smaller competitors. 

The new regulations have prohibited companies from easing crypto contracts’ trading that involve any crypto asset that is categorized as a derivative or security for Canadian clients. Moreover, from now onwards, stablecoins are considered as securities. 

Though Binance has disagreed with the fresh regulations, it has expressed the wish to work with Canadian regulators and create a complete regulatory framework for cryptos. On that note, the exchange might come back to Canada after coming up with a practical plan. 

Meanwhile, others are urging Binance to establish an individual entity just like Binance US. 

Just do a Binance Canada like you already did for Binance US.

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— Etherean Maximus ⚔️ (@EthereanMaximus) May 12, 2023

Paxos, OKX and dYdX are the exchanges that withdrew from Canada before Binance. However, certain exchanges such as Kraken, Coinbase and Crypto.com are complying with the strict implementations of Canada. 

The crypto winter of 2022 damaged more than a trillion dollars from the market value of the industry. As a result, securities regulators and lawmakers asked for strict guidelines regarding operations of crypto firms and the way they hold funds of customers. 

In March, the U.S. Commodity Futures Trading Commission sued Binance and its CEO Changpeng  Zhao for running an illegal exchange and a fake compliance program.

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• Source: https://investorbites.com/binance-exits-canada-after-imposition-of-new-crypto-rules/