The world’s largest crypto exchange cites new stablecoin guidance and investor limits as reasons to exit.
Binance announced that it will cease operations in Canada, as the regulatory environment in the country becomes increasingly murky.
“We had high hopes for the rest of the Canadian blockchain industry,” tweeted the largest crypto exchange by volume on Friday. “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.”
Back in February, the Canadian Securities Administrators (CSA) announced new guidance that prohibits crypto asset trading platforms across Canada to allow customers to purchase or deposit stablecoins without the CSA’s prior approval.
To obtain approval, crypto trading platforms in Canada must pass the CSA’s list of due diligence checks, to abide by “enhanced investor protection commitments.”
In Binance’s Friday tweet, the crypto exchange added that it does not agree with Canada’s latest regulations, but hopes to work with regulators in the country to further develop a “thoughtful, comprehensive regulatory framework” for cryptocurrencies.
Binance’s Canadian users will be “receiving an email with comprehensive information” regarding Binance’s exit.
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
Over events from the past year, Binance has been facing increased scrutiny from US-based regulators. In February, Binance CEO and founder Changpeng “CZ” Zhao reportedly was seeking to end relationships with US banks and service firms, and re-evaluate its US venture capital investments.
CZ describes its exit from Canada as holding “sentimental value”, as the founder himself is a Canadian citizen.
As Canadian crypto regulations tighten up, rival exchange Coinbase is in talks with regulators to continue business in Canada. Elliott Suthers, Coinbase’s communications director, wrote, “We remain as committed as ever to the Canadian market as a core component of our international road map.”
Canada’s latest set of regulations requires the segregation of crypto assets held in custody, and implements tighter rules for re-hypothecation (where banks, brokers, and individuals use collateral that they do not own to help finance their assets), margin trading, and certain trades that involve proprietary tokens or stablecoins.
“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,” wrote Binance.
