Binance exits Canada as crypto trading platforms feel broader impact of stricter regulations

BinanceThe world's largest cryptocurrency trading platform by daily transaction volume joins other cryptocurrency firms in withdrawing from the Canadian market amid mounting regulatory pressure.

Announcing its departure via Twitter on Friday, Binance said that while it was hopeful for the rest of the Canadian blockchain industry, “the new guidance related to stablecoins and investor limits… makes that the Canada market is no longer sustainable for Binance at this time."

Binance's country manager for Canada resigned last month.

In a move to prevent another FTX collapse, the Canadian Securities Administrators (CSA) are placing more restrictions on crypto trading platforms in the country. Included among those changes is a ban on exchanges allowing users to purchase or deposit proprietary stablecoins or tokens “without the prior written consent of the CSA.”

These stricter rules have put pressure on crypto companies as they navigate new compliance standards in a volatile crypto market. This has driven people like paxos and OKwho announced their departure from Canada in April, and now Binance.

Founded by Changpeng Zhao (CZ) in 2017, Binance is a cryptocurrency exchange that claims to have amassed more than 120 million users worldwide. In addition to operating his trading platform, his other lines of business include an NFT marketplace, his own token, staking servicesand a blockchain called Binance Smart Chain, among others.

Although Binance was initially established in China, it has ties to Canada. Zhao grew up in Canada and graduated from McGill University.

The departure from Canada comes after years of Binance's turbulent relationship with regulators in the country and beyond.

In 2021, Binance announced that it was extraction of Ontario when regulators began cracking down on unregistered crypto platforms. Binance was not among the six The crypto trading platforms were registered in the province at the time, and registration was required to continue their business in Ontario.

Since then, Binance has received similar notices from other countries such as the United Kingdomhe Cayman Islands, thailand, Hong Kongand Singaporein all of which Binance halted trading for users or permanently shut down operations because it lacked the required license.

Despite its departure from Ontario, Binance continued to operate in Canada and headed west. In 2022incorporated in Alberta and hired two executives who had prior experience working with Canadian securities regulators.

As part of its broader strategy to expand into Canada, Binance has hired Lawrence Truong as its VP and Country General Manager and Darren Gross as its Calgary-based Chief Compliance Officer.

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Gross has worked as a compliance advisor with the Alberta Securities Commission (ASC) and the Investment Industry Regulatory Organization of Canada (IIROC). Truong was previously a regulatory analyst at ASC and served as chief compliance officer at Coinsquare, which is now merging with other Canadian crypto companies WonderFi and CoinSmart.

A month before Binance announced its exit from the Canadian market, Truong announced its resignation from Binance.

Binance has also faced recent scrutiny from the United States. In March, the US Commodity Futures Trading Commission filed a lawsuit against Zhao and Binance for alleged “deliberate evasion of US law”.

In its complaint, the US markets regulator claims that Binance is operated through an “intentionally opaque common company”, choosing to “knowingly disregard” the provisions set forth in the Commodity Exchange Act.

As Binance has chosen to exit the markets rather than abide by stricter rules on cryptocurrency trading, some platforms, on the other hand, have decided to work with regulators.

Last month, ten The crypto trading platforms have committed to pre-register with the Canadian Securities Administrator before the March 24 deadline, allowing them to operate in Canada while they seek registration. These platforms include American companies Coinbase, Kraken, and Gemini, as well as the Montreal-based startup. shakepay.

Binance had also filed a Pre-Registration Commitment (PRU) with ASC and CSA, with plans to launch a trading platform made specifically for Canada, although this filing came after the March deadline.

The CSA has provided without details regarding your future treatment of crypto platforms that failed to submit by the deadline or submitted PRUs that are ultimately not accepted.

Featured image courtesy of Binance.