On May 13, one of the largest crypto firms, Binance, announced its exit from Canada after finding new regulations “untenable.” Similar to U.S. regulatory bodies, the Ontario Securities Commission spoke out about strict regulations on digital assets like cryptocurrency.
Key Highlights
- Binance exits Canada as the OSC and CSA impose new guidelines for digital trading platforms.
- CEO of Binance, Changpeng Zhao (CZ), immigrated to Canada at 12 years of age and took the tough decision to stop operations in his home country.
- Customers in Canada will receive an email on behalf of Binance with details regarding their accounts.
New Regulations Cause Havoc for Crypto Firms
After a continued act of cryptocurrency hunting by the SEC in the U.S., the Canadian side, OSC, and CSA are on the same trail. The Ontario Securities Commission (OSC) released a list of exemptive relief for crypto organizations in April. Before that, the Canadian Securities Administrators (CSA) announced new guidelines for trading platforms.
The lawsuit against FTX in the U.S. is considered to be the start of this practice, and Binance seems to be caught in the domino effect.
According to the renewed guidelines, cryptocurrency trading platforms require prior approval from the CSA to continue offering services within the boundaries of Canada. The organization finds “investor limits” to be a prime reason for their exit, according to their Twitter post.
Apart from Binance, OKX, dYdX, and Paxos have also exited Canada.
This is not the first case of a crypto trading platform exiting due to regulatory scrutiny. OSC revealed that organizations failing to abide by the rules will be at potential risk of legal enforcement.
Binance Makes an Emotional Exit from Hometown
In the above tweet, Binance expresses its sentimental value for Canada, as its founder, Changpeng Zhao (CZ), immigrated to the country in 1989. CZ was just 12 years old back then, and he came to Vancouver with his mother and sister, which made this exit a tough decision for him.
Binance does not seem happy about the new regulations at all and has not agreed to all the guidelines. They claimed that they “had high hopes” for the blockchain industry in Canada.
However, their preferred decision ended in an exit, but the organization keeps the hope of making a return shortly. A tweet stated:
“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.”
In the current scenario, Binance reveals that the new regulations imposed make the “market no longer tenable.”
Cryptocurrency Platforms in Canada at a Potential Risk
Looking at the recent steps by CSA and OSC, it seems that many crypto trading platforms operating in Canada are prone to risk. However, unlike Binance, their competitor, Kraken, decided against conducting a pre-registration on March 30 under the guidelines of the Ontario Securities Commission. The managing director of Kraken, Mark Greenberg, revealed that they are accepting the new regulations and adhering to them.
Mark Greenberg continued to present his plans by saying:
“It is for individuals to make informed decisions” and to “play by the stated rules.”
As for Binance, they anticipated a change of mind, but since their current exit, it is unclear if and when they can make a return to the Canadian market.
