On May 12, the cryptocurrency exchange announced that Binance will withdraw from the Canadian market. Referring to its withdrawal as “proactive,” Binance cited the toll taken on the country’s crypto industry by new guidance issued by Canadian regulators.
Binance, along with some of its smaller competitors, is joining the Canadian exodus due to the introduction of rules by the Canadian Securities Administrators (CSA) on February 22. The rules mandated them to file new pre-registration undertakings and comply with additional restrictions.
In a tweet, Binance stated that new Stablecoin-related guidance and investor limits made the Canadian market untenable, despite reportedly filing a pre-registration undertaking.
The Canadian Securities Administrators (CSA) rules prohibit firms from allowing Canadian clients to enter into contracts. This involves crypto assets defined as securities or derivatives, including stablecoins.
In March, OKX withdrew from the Canadian market. Later, in April, dYdX and Paxos followed suit. Via email, Binance issued instructions to Canadian users, directing them to close their open positions by September 30, 2023.
From October 1, 2023, Canadian customers will be put into liquidation-only mode. Despite not agreeing with the new guidance, Binance hopes to engage with Canadian regulators for a comprehensive regulatory framework.
Binance withdrew from Ontario, Canada in March 2022 due to a disagreement with regulators, despite its operations in all other provinces and territories across the country. Although Binance’s departure from the Canadian market may disappoint some crypto enthusiasts, other options remain. An example is Kraken, which has committed to staying. The CSA lists 11 authorized platforms for Canadians.
The long-term consequences of the new regulations are still uncertain. However, the decision of certain platforms to continue operating in Canada is seen as encouraging by some. This suggests that despite the regulatory changes, there is still confidence and optimism within the cryptocurrency sector. This is regarding the future of the market in Canada.
The commitment of these platforms demonstrates a belief that they can navigate the regulatory landscape effectively. It also signals that the industry as a whole recognizes the potential and importance of the Canadian market, even in the face of regulatory challenges.