Binance has decided to leave Canada and suspend its operations after the country enforced stricter crypto rules. With that decision, Canadians can no longer use one of the largest cryptocurrency exchanges in the world.
The country recently announced new stablecoins and investor limits which become the tipping point for Binance to leave the Canadian market.
Canada’s New and Tighter Crypto Rules
Earlier this year, the Canadian Securities Administrators (CSA) set new guidelines for crypto exchanges and brokerage firms. Under the new guidelines, the platform and firms had 30 days to register themselves or to leave.
The firms that went for the registration and decided to stay would require to comply with stricter crypto rules and regulations. This meant seeking the CSA’s approval before letting traders purchase or deposit stablecoins.
The crypto market has caught the attention of various regulators and governments around the world. It is particularly been the case after Binance’s major competitor FTX collapsed in November 2022, which lead to a huge crash in the crypto market. It also led to the biggest fall in the prices of digital coins, leading to a significant wipeout of investor wealth.
After the crypto winter of 2022 that caused a near wipeout of more than 1 trillion dollars in terms of market capitalization, there was an increased demand for tighter rules and regulations.
Both lawmakers and traders wanted to see tighter laws regarding how the crypto trading firms operate and hold the customer funds.
Role of CSA in Binance’s Exit
The Canadian Securities Administrators (CSA) is an organization that represents Canada’s provincial and territorial watchdogs. It has been coming up with stricter laws to regulate the crypto market in a bid to protect traders from huge losses.
Back in December 2022, the CSA revealed new laws under which all crypto trading platforms were stopped from giving leverages or margins to any Canadian client. Furthermore, the news laws made it clear that the organizations increased the scrutiny over various crypto platforms, including Binance.
As per CoinDesk, Binance will have to go through various authorities who will conduct investigations before finally giving it approval. The crypto exchange has not only faced strict scrutiny in Canada but has also come under light in the US as well.
Various departments and agencies such as the IRS (Internal Revenue Service) and the DOJ (Department of Justice) have been investigating Binance for allowing money laundering schemes since 2021.
Furthermore, these departments are also looking into reports and are carrying out a probe against the platform for letting users bypass sanctions against Russian financial institutions.
In March 2023, Binance and its CEO Zhao were charged for allegedly providing crypto derivatives to the Commodity Futures Trading Commission. There were other charges as well leveled against this crypto exchange.
Binance’s Final Message
In its latest announcement, the platform informed Canadian users about its decision to leave the country through different social media platforms. Binance said that it tried to delay the decision as much as possible to find out other avenues to protect its Canadian users.
Bloomberg reports that the platform did start and file the paperwork to start the registration process in March this year. However, it made the ultimate decision of leaving the country since its operation is “no longer sustainable.”
At the end of the announcement, the crypto exchange expressed its desire to come back and resume its operations in Canada, which is also the home country of its CEO Changpeng Zhao shortly.
It also informed the users that they are in continuous engagement with the Canadian authorities to come up with an “extensive regulatory framework.”