Binance, a leading cryptocurrency exchange, announced on May 12 that it would be halting operations in Canada. The company explained that it was joining other crypto companies that are proactively withdrawing from the Canadian marketplace. Although Canada is a small market that holds sentimental value for Binance, the recent regulatory guidance has made operating in the country unfeasible.
Intends to Return to the Market When Regulations Change
Despite its departure, Binance expressed optimism about the development of Canada’s crypto sector. The company does not agree with the new regulatory guidance but intends to continue engaging with Canadian regulators. Binance hopes to eventually return to the market when Canadian users have the freedom to access a broader suite of digital assets.
In February, Canadian securities regulators introduced new guidance that required crypto companies to submit pre-registration filings and follow certain rules. Crypto companies operating in Canada are now required to segregate funds belonging to Canadian users and withhold margin or leverage trading from those users.
Other crypto companies that have withdrawn their services from the Canadian market include Paxos, dYdX, Blockchain.com, and OKX. However, Kraken, Coinbase, Crypto.com, and Gemini have decided to continue operating in Canada.
Binance’s decision to halt operations in Canada highlights the challenges that crypto companies face when operating in a highly regulated marketplace. While Canada’s regulatory guidelines aim to protect investors and promote a safe environment for investing, they can also make it difficult for companies to operate and innovate. Binance’s departure is a reminder that regulatory guidance can have a significant impact on the crypto industry, and companies need to carefully consider their options when operating in different markets.