Following ongoing regulatory issues within the country, Binance has decided to effectively withdraw from the Canadian market.
On Friday evening, the cryptocurrency exchange announced that it will begin terminating its services to Canadian users. Blaming new government guidelines provided to exchanges, Binance said the Canadian market was no longer tenable.
Canadian Guidelines Not Crypto-Friendly
The statement said that Binance hopes to engage in a dialogue with Canadian regulators going forward. It added that:
“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.”
The guidelines in question were issued by the Canadian Securities Administrators (CSA) in February. Posited as investor protection provisions following a run of crypto sector insolvencies in 2022. The guidelines target offshore companies like Binance that service Canadian clients.
Among other commitments, the CSA required crypto exchanges to segregate crypto assets held for local clients. It also imposed a ban on margin or other forms of leverage. Also, a ban on selling stablecoins without the regulator’s permission.
In Friday’s tweet, Binance argued that the new guidance imposed too heavy a burden on the company, especially the limits on stablecoin sales. Canadian users of the platform will further details about how this will impact their accounts by email, the tweet said.
Binance Turns Its Back on Canada
The decision to exit the Canadian market appears to have been especially difficult for Binance.
Although it represents one of the firm’s smaller markets, Binance said that Canada “held sentimental value for us as the home country of our founder.” Born in China, Binance’s co-founder and CEO Changpeng Zhao, commonly known as CZ, emigrated to Canada at a young age and holds Canadian citizenship.
Prior to Friday’s announcement, Binance had already come to an agreement with the Ontario Securities Commission to stop onboarding new users in Canada’s most populous province.
In that agreement, the company laid out assurances that it would implement controls to prevent trading activity originating from within Ontario, or by Ontario-based users.
Binance US Fights On
While Binance may be on the back foot in Canada, over the border in the U.S. the company is maneuvering to protect its business interests from zealous regulators.
Facing regulatory scrutiny on multiple fronts, Binance’s U.S. arm is reportedly considering ways to reduce CZ’s majority stake.
As The Information wrote on Thursday, the company’s senior leadership has discussed the move in light of the Commodity Futures Trading Commission lawsuit against Binance and Zhao. Apparently, they believe reorganizing the firm’s ownership may help improve its standing in the eyes of U.S. regulators.
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