One of the largest crypto exchanges in the world, Binance, has exited Canada amid tough regulatory rules.
The company cited increasing regulatory tensions as the primary reason behind its exit. Binance via a tweet disclosed that the new guidance concerning stablecoins and investor limits provided to crypto exchanges has made the Canadian market untenable.
The tweet reads,
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“Unfortunately, today we are announcing that Binance will be joining other prominent crypto businesses in proactively withdrawing from the Canadian marketplace. We would like to thank those regulators who worked with us collaboratively to address the needs of Canadian users. Albeit a small market, it held sentimental value for us as the home country of our founder.
Unfortunately, today we are announcing that Binance will be joining other prominent crypto businesses in proactively withdrawing from the Canadian marketplace.
We would like to thank those regulators who worked with us collaboratively to address the needs of Canadian users.…
— Binance (@binance) May 12, 2023
“We had high hopes for the rest of the Canadian blockchain industry. Unfortunately, new guidance related to stablecoins and investor limits provided to crypto exchanges makes the Canadian market no longer tenable for Binance at this time. We put off this decision as long as we could to explore other reasonable avenues to protect our Canadian users, but it has become apparent that there are none.
“Our remaining Canadian users are receiving an email with comprehensive information on how this will impact their accounts going forward. While we do not agree with the new guidance, we hope to continue to engage with Canadian regulators aimed at a thoughtful, comprehensive regulatory framework. 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.”
It is worth noting that throughout the previous year, Binance faced heightened regulatory scrutiny from authorities in North America, which spurred the crypto exchange to scale back its operations in the region.
Binance joins the list of crypto companies such as Paxos and dYdX that have exited the Canadian market amid tough crypto regulatory rules. Following the shutdown of Binance operations in Canada, the company expressed confidence in its eventual return to the North American country, considering that it is the home of CEO Changpeng Zhao. The company further added that it is still maintaining discussions with Canadian authorities to establish a well-considered and comprehensive regulatory framework collaboratively.
Meanwhile, analysts disclose that Binance’s exit from Canada may have a negative impact on the country’s crypto ecosystem, which can lead to market fragmentation and discourage other exchanges from expanding in the country.
Recall that in February this year, the Canadian Securities Administrators (CSA) issued new guidance that banned crypto asset trading platforms from allowing customers to purchase or deposit stablecoins without prior approval from the CSA. To obtain approval, crypto trading platforms would need to successfully pass the CSA’s thorough due diligence checks.