Regulatory hurdles have once again hit Binance in North America, with the world’s largest cryptocurrency exchange announcing on Friday that it would cease operations in Canada due to tightened crypto rules.
See related article: Binance.US cites ‘hostile’ regulator, yanks US$1.3 billion deal to buy Voyager Digital
Fast facts
- Amid heightened regulatory oversight aimed at the crypto exchange in the U.S., Binance has now decided to exit the neighboring Canadian market. The company announced in a tweet on Friday that it had put off the exit decision as long as possible in order to explore ways to protect its Canadian users. But, it said, “it has become apparent that there are none.”
- “We had high hopes for the rest of the Canadian blockchain industry,” Binance said in the tweet. “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.”
- The company added that, while the Canada market is small, “it held sentimental value” as the home country of its founder Changpeng Zhao, who is a Canadian citizen.
- Binance said it is sending out emails to Canadian users detailing its next steps and how the company’s withdrawal from the country will impact their accounts.
- Binance’s exit comes after the Canadian Securities Administrators regulatory body said in February that crypto firms planning to operate in Canada must register their compliance with a new set of regulatory guidelines.
- Those guidelines require crypto trading platforms to follow custody rules, ensure segregation of crypto assets held for local clients and refrain from offering margin, credit or other forms of leverage.
- Failure to comply would require companies to offload Canadian users and block the jurisdiction.
- In the U.S., the Commodity Futures Trading Commission (CFTC) sued Binance and Zhao in March, for allegedly offering unregistered cryptocurrency derivatives in the U.S.
- Zhao rejected the CFTC’s allegations, saying the regulator’s complaint “appears to contain an incomplete recitation of facts.”
See related article: Binance.US may reduce founder Changpeng Zhao’s ownership stake: The Information
