Binance withdraws from Canadian market due to tougher regulations

Withdrew from Canada due to changes in the regulatory environment

Major cryptocurrency exchange Binance has announced that it will be exiting the Canadian market. As a background, he cites the tightening of regulations in Canada.

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

Binance explained:

New rules on stablecoins and investor restrictions imposed on cryptocurrency exchanges have prevented them from continuing to operate in the Canadian market at this time.

We were looking for other sensible ways to postpone this decision and protect our Canadian users, but found no such option.

We will send an email to Canadian users with comprehensive information about the upcoming impact. While not agreeing with the agency’s new guidance, he continued that he would continue discussions with Canadian regulators toward a well-thought-out and comprehensive regulatory framework.

Binance co-founder and CEO Changpong Zhao (CZ) also said that the Canadian market had “emotional value” for Binance, as he is Chinese-Canadian.

Tighter regulation of stablecoins and leverage

In a change to the regulatory environment, the Canadian Securities Administration (CSA) announced in February that it would strengthen investor protection on cryptocurrency exchanges.

Cryptocurrency exchanges may not offer their users services such as purchasing or depositing stablecoins or proprietary tokens without the prior written consent of the CSA.

It is also prohibited from offering leveraged products, such as margin trading, to Canadian users. In addition, regulatory standards regarding the storage and separate management of virtual currencies held on behalf of users have been strengthened.

If CSA does not provide a business registration that includes these provisions, CSA will take appropriate steps to terminate service to existing Canadian users and prevent Canadian users from accessing their products and services. I was notified to impose restrictions.

Commenting on the background to the tightening of regulations, CSA Chairman Stan Majidson said:

The recent bankruptcy of cryptocurrency trading platforms highlights the enormous risks involved in trading cryptocurrencies. Especially when done on unregistered platforms based outside of Canada, the risks are greater.

In Canada, part of the pension fund was also damaged due to the collapse of the old Terra ecosystem in 2022 and the FTX bankruptcy.

connection: Canada’s largest pension fund ends consideration of cryptocurrency investment

What is a stablecoin

A cryptocurrency whose price is always stable. Stablecoins are a type of cryptocurrency, and unlike BTC, ETH, and XRP, which have volatility, their purpose is to maintain their value ($1) backed by the US dollar. In addition to US dollar-backed stablecoins (USDT/USDC), there are also stablecoins that use algorithms.

Cryptocurrency Glossary