Binance, the largest crypto exchange by trading volume;has announced that;it would exit the Canadian market due to the new regulatory framework in the country.
The move made the company the latest crypto-related firm that had to halt operations in Canada due to the new regulations after OKX, Deribit, Blockchain.com, and Paxos.
- The decision came nearly three months after the Canadian Securities Administrators (CSA) published a notice requiring crypto exchanges to sign legally-binding commitments while waiting to be registered with the regulatory body.
- The pre-registration process confronts crypto exchanges with the risk of potential enforcement action if they do not comply with the new rules.
- The rules include investor limits, mandatory registrations, and a new stablecoin regulation that bans crypto exchanges from allowing users to buy or deposit stablecoins, which the agencyclassifies as a security, in the country without obtaining prior approval from the CSA by passing the due diligence checks.
- Binance said the new guidelines made the Canadian market no longer tenable for its operations.
- The popular crypto exchange also underlined that it hopes to engage with Canadian regulators to create a comprehensive framework for crypto operations, and it believes it will someday return to the country.
- The firm added that the exit has a sentimental value since its;CEO Changpeng Zhao (CZ) is a Canadian citizen, though he was born in China.
- On the flip side, some exchanges like Coinbase and Kraken signed the pre-registration undertaking with the regulators to continue operating in Canada, hinting at their intention to comply with the upcoming regulations.
- All crypto exchanges currently must register with Canadian regulators to operate in the country.
- Over the past several years, Binance came under increased scrutiny also in other parts of North America, with the legal actions by the U.S. Commodity Futures Trading Commission (CFTC), the Internal Revenue Service (IRS), the Securities and Exchange Commission (SEC), and federal prosecutors.