Binance, which is arguably one of the biggest cryptocurrency exchanges in existence, is exiting the Canadian market due to new crypto regulations in the country. The exchange released a statement recently in which it stated that it is “Proactively withdrawing from the Canadian market”.
Binance and Its Entry Into the Canadian Market
Binance officially launched in the Canadian market on June 20th, 2020. However, its operations in the country were marred by frequent regulatory obstacles. The latest regulatory hurdle was the stricter rules imposed by the Ontario Securities Commission (OSC). It imposed stricter rules for cryptocurrency trading platforms in February 2023.
Binance had initially registered as a Money Services Business (MSB) with FINTRAC, the Financial Transactions and Reports Analysis Centre of Canada. It also launched a fiat gateway for Canadian users in September 2020. This enabled Canadian users to pay for cryptocurrencies directly using the Canadian Dollar (CAD).
Canada has been tightening its regulations for crypto asset trading for quite some time now. It has introduced a pre-registration process along with mandatory compliance with securities laws. Regulatory authorities have decided to implement potential enforcement action on companies that do not comply.
Binance’s Decision to Exit the Canadian Market
According to a tweet by Binance’s official Twitter handle, the exchange has taken this decision due to new guidance related to investor limits and stablecoins. It further explained that this decision was unavoidable after it examined all other reasonable avenues for its Canadian users.
While Binance doesn’t agree with the new guidelines put forward by Canadian authorities, it is confident that it will return later when rules and laws loosen. The announcement further stated that it will send an email to all of its Canadian users detailing how their accounts will be affected going forward.
Binance and Its History of Regulatory Problems
This was not the first time that Binance has experienced problems with regulatory authorities in different countries. For instance, a high court in the UK slapped Binance with an interim proprietary injunction some time ago.
This decision was taken after a fraud victim traced stolen funds to particular user accounts on the exchange holding a total of 470,904 USDT. Binance announced that it cannot comply with the decision since it was filed without prior notice.
Binance argued that the USDT in question was transferred to the exchange’s central pooled funds addresses. The USDT was then mixed and dissipated in the ordinary course of business before it was served with the injunction.
The high court eventually agreed with the exchange and discharged the injunction. It further ordered the claimant to bear Binance’s costs, amounting to $113,685. The court didn’t find any evidence that the exchange was involved in or aware of the fraud.
Apart from this, Binance has faced regulatory scrutiny in other countries as well. For instance, in the United States, it has been investigated by the Justice Department and the Internal Revenue Service for violating tax and anti-money laundering laws.
Binance was also warned by German authorities for offering tokens connected to stocks without providing an investor prospectus. Japanese financial regulators accused Binance of operating in the country without proper registration. This has led to Binance scaling back some of its product offerings in several countries and hiring new compliance officers.
A History of Binance
Binance was founded in 2017 in Hong Kong. It has gained a reputation as being one of the biggest and most reliable exchanges in the world. Created by Changpeng Zhao, the exchange grew to be one of the largest in the world within six months of its existence.
The exchange is primarily known for its high-quality crypto-to-crypto trading in some of the most favourable trading conditions that exist in the crypto market. It also has some of the lowest transaction fees combined with high liquidity. To encourage more traders to join its platform, Binance has offered discounts to users who pay in its native token, BNB.
Binance offers some of the highest standards of safety and security, which is delivered using a multi-clustered architecture with several tiers. This allows the exchange to deliver high processing throughput, capable of processing almost 1.4 million orders per second.
The decision by Binance to exit the Canadian market is seen as a significant blow to the nation’s crypto industry. As a result of the move, many Canadian users do not have access to a broad range of cryptocurrencies and related services. While Binance has said that it will work towards a solution to return to the Canadian market at the earliest possible time, it remains to be seen how this move will impact crypto trading in the country.
Frequently Asked Questions
When Did Binance Become the Largest Cryptocurrency Exchange of the World?
Binance, which was founded in 2017, achieved a market cap of $1.3 billion in January 2018, becoming the biggest cryptocurrency exchange in existence. It has been able to maintain its status as one of the largest cryptocurrency exchanges to date.
When Did Binance Enter the Canadian Market?
Binance entered the Canadian market in 2017, the same year it was founded. However, the exchange halted its services in Ontario in March 2022 before finally exiting the rest of the country in May 2023. According to the Binance team, there are no concrete plans to re-enter the Canadian market.
Which Canadian Regulatory Body Is Responsible for Regulating Cryptocurrencies?
The main regulatory framework for the regulation of cryptocurrencies in Canada is provincial securities and derivatives regulation, which is overseen by the Canadian Securities Administrators. Another important regulatory body is the Financial Transactions and Reports Analysis Centre of Canada, or FINTRAC.
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