On May 12, Binance, the popular cryptocurrency exchange, took to Twitter to announce its proactive decision to exit the Canadian market. This strategic move is due to the detrimental impact of the regulatory guidelines by Canada on the nation’s cryptocurrency market.
Joining a wave of smaller competitors, Binance is compelled to leave Canada due to the recent regulations introduced by the Canadian Securities Administrators (CSA) on February 22. These regulations obliged cryptocurrency exchanges to submit new preregistration undertakings and adhere to fresh regulatory requirements.
Binance shared on Twitter:
“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 explore other reasonable avenues to protect our Canadian users, but it has become apparent that there are none.’’
Binance actively operated in all Canadian provinces and territories except for Ontario. The exchange halted its operations there in March 2022 due to a prolonged dispute with provincial regulators.
The recently introduced CSA regulations classify stablecoins as securities. They also prohibit companies from enabling Canadian clients to engage in certain crypto contracts. Customers cannot be involved with contracts that include purchasing or selling any crypto asset that qualifies as a security and/or derivative.
The crypto exchange also stated:
“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. We are confident that we will someday return to the market when Canadian users once again have the freedom to access a broader suite of digital assets.”
Furthermore, Binance noted the sentimental value the Canadian market held for the company.
At that point, we want to emphasize that the co-founder and CEO of the exchange platform, Changpeng “CZ” Zhao, is a Canadian citizen.
In March, OKX also decided to withdraw from the Canadian market. Subsequently, in April, the decentralized exchange dYdX and blockchain fintech Paxos followed suit and exited the market. From the examples with the situation of Binance, we can say that the Canadian market is very strict for cryptocurrency exchanges and companies.