In a surprising move, Binance, one of the world’s leading cryptocurrency exchanges, announced its withdrawal from Canada on May 12. This decision comes on the heels of Canada’s tightened regulations on cryptocurrency trading platforms. These include the introduction of mandatory registrations and investor limits.
The OSC has been implementing these new guidelines over the past months as a response to the rapidly evolving crypto industry. The Ontario Securities Commission has clarified that potential enforcement action will be taken. The regulatory institution pointed out that they will focus on companies failing to adhere to these updated regulations. Binance expressed its disagreement with the recent changes through a statement on Twitter.
“Unfortunately, (the) 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 statement
The crypto exchange expressed hope for future engagement with Canadian regulators. According to Binance, this is necessary in order to construct a more comprehensive framework for cryptocurrency operations in Canada. Despite this occurrence, Binance maintains a positive outlook on its potential return to the Canadian market.
“We are confident that we will someday return to the market when Canadian users once again have the freedom to access a broader suite of digital assets…”
Binance’s Statement
Binance’s History; Including Regulatory Issues
Binance was founded by Canadian national Changpeng Zhao, also known as CZ. His platform, along with others in the crypto industry, has been a target of regulatory action worldwide. This increased regulatory focus intensified after the collapse of Binance’s rival, FTX, in November 2022. The collapse of this giant led to a significant drop in the prices of major cryptocurrencies.
The so-called “crypto winter” of 2022 resulted in a loss of over a trillion dollars from the industry’s market value. This dramatic downturn pushed lawmakers and regulators to demand stricter disclosure guidelines from crypto companies. Understanding how major the collapse of FTX was, such action was expected.
In the midst of these regulatory challenges, Binance and its CEO CZ found themselves in legal hot water. In March, the U.S. Commodity Futures Trading Commission sued Binance and CZ. According to the lawsuit, Binance and CZ allegedly partook in the operation of an “illegal” exchange and a “sham” compliance program.
“The legal complaint appears to contain an incomplete recitation of facts…”
CZ Binance’s statement on Binance’s blog