Binance halts operations in Canada amid a changing regulatory framework

Binance, the largest exchange globally by trading volumes, has announced plans to exit the Canadian market. Binance posted an announcement on Twitter on May 12 saying that the withdrawal from the Canadian market was proactive and it would follow the new guidance issued by regulators in Canada.

Binance halts operations in Canada

Canada’s crypto regulatory framework has changed over the past few months. The actions taken by Canadian regulators have affected the operations of many crypto firms in the country that have been forced to suspend their operations or explore new ways to achieve compliance and continue serving crypto investors in the North American country.

Binance is joining the list of other cryptocurrency exchanges halting their operations in Canada. Crypto firms have been exiting the Canadian market because the Canadian Securities Administrators (CSA) released new guidelines on February 22. The new CSA guidelines required that cryptocurrency exchanges operating in Canada file fresh preregistration undertakings and comply with the new restrictions.

In its recent tweet, the Binance exchange said it had filed a new preregistration undertaking. However, it said that the restrictions around stablecoins and the new threshold for investor limits made it no longer tenable for the Binance exchange to continue serving the Canadian market.

“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 Canada 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,” the exchange said.

Crypto firms leave Canada amid a shifting regulatory framework

The new CSA guidelines have banned crypto firms operating in Canada from allowing Canadian users to access crypto contracts involving the purchase and sale of any crypto asset that might be classified as a security or derivative. Regulators have also urged these firms to stop trading stablecoins that might be described as a security.

Binance is not the only exchange that has exited the Canadian market. OKX left the Canadian market in March. In April, the dYdX exchange also halted Canadian operations, with Paxos also leaving the market.

Binance sent an email to its Canadian users instructing them to close any open positions by September 30, 2023. Binance has also warned that from October 1, 2023, all Canadian accounts would be placed on liquidation mode only.

The exchange said that it hoped to continue engaging with Canadian regulators to formulate a comprehensive and insightful regulatory framework. Before halting its Canadian operations, Binance operated across all provinces and territories across Canada, apart from Ontario. Binance exited Ontario in March 2022 after a disagreement with regulators in the province.

However, not all crypto firms are withdrawing from Canada. Kraken filed a new preregistration undertaking in March. At the time, the exchange also said that it was committed to sustaining its operations in the country.