The cryptocurrency exchange Binance announced its exit from Canada on May 12. It referred to its withdrawal as “proactive” as new regulatory guidelines from Canada’s regulators continue to harm that nation’s cryptocurrency market.
Binance is joining several of its smaller rivals in leaving Canada due to new regulations that the Canadian Securities Administrators (CSA) introduced on February 22 that required them to submit new preregistration undertakings and follow new regulations.
On Twitter, Binance revealed its plans and stated that it will “be joining other prominent crypto businesses in proactively withdrawing from the Canadian marketplace.” The exchange acknowledged that it was a tiny but “sentimental” market, but it planned to continue to operate there. But the recent decision made by the Canadian Securities Administrators stands in its way.
Although Binance had reportedly filed a new preregistration undertaking, it explained in a tweet:
“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.”
Canada’s New Regulatory Laws
The new CSA regulations identify stablecoins as securities and forbid companies from allowing Canadian clients to enter into crypto contracts to buy and sell any crypto asset that is itself a security and/or a derivative.
In February, the CSA announced new regulations that require regional exchanges to get approval before taking stablecoin deposits or enabling users to purchase such assets. The procedure is drawn out since the watchdog has several due diligence checks in place.
“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.”
Canada has generally taken a supportive stance toward cryptocurrencies, with a small number of conventional financial institutions investing in the industry. The country also approved one of the first spot Bitcoin ETFs a few years back, but its recent policy change harmed several exchanges, including Crypto.com.