In a strategic move amidst evolving regulatory guidelines, Binance, the prominent cryptocurrency exchange, has decided to withdraw from the Canadian market.
The company made the announcement via Twitter on May 12, characterizing the decision as a proactive measure in response to the impact of new guidance issued by Canadian regulators, which has created challenges for the country’s crypto industry.
Explaining the situation in their tweet, Binance wrote:
“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.”
Binance’s departure from Canada aligns it with several smaller competitors who have also exited the market due to the introduction of rules by the Canadian Securities Administrators (CSA) on February 22. OKX, a crypto exchange, withdrew from the Canadian market in March, followed by decentralized exchange dYdX and blockchain fintech Paxos in April.
These rules mandated crypto exchanges to comply with new preregistration undertakings and adhere to additional restrictions.
Under the CSA regulations, firms are prohibited from allowing Canadian clients to engage in crypto contracts involving securities or derivatives. Additionally, stablecoins have been categorized as securities.
Binance has notified its Canadian users via email, instructing them to close their open positions by September 30, 2023. As of October 1, 2023, Canadian customers will only have access to liquidation options.
It is worth noting that Binance had previously withdrawn from the province of Ontario in March 2022 after encountering regulatory disagreements.
However, despite these recent developments, the Canadian crypto community still has options. Kraken, another prominent cryptocurrency exchange, has filed the required preregistration undertaking and expressed its commitment to continue operating in Canada. The CSA maintains a list of 11 platforms that are authorized to conduct business with Canadians, providing a measure of continuity for cryptocurrency enthusiasts in the country.