On Friday, Binance, the largest crypto exchange, announced the Twitter that it would be an “active withdrawal” from Canada.
“We have high hopes for the rest of the Canadian blockchain industry,” the company wrote in a tweet. “Unfortunately, the new guidance related to stablecoins and investor limits given to crypto exchanges has made the Canadian market untenable for Binance right now.”
Unfortunately, today we announce that Binance will join other prominent crypto businesses in actively withdrawing from the Canadian market.
We want to thank those regulators who have worked collaboratively with us to meet the needs of Canadian users.…
– Binance (@binance) May 12, 2023
While Canada is a small market for crypto globally, it is important that the one time house by Changpeng Zhao, commonly known as CZ, the cofounder and CEO of Binance. Zhao moved to Vancouver, British Columbia, with his mother and sister from China in 1989 to join his father, who was enrolled in a doctoral program to study geophysics.
Binance joins a longer list of crypto companies that have chosen to leave Canada due to its regulatory environment, including Paxos-THE former issuer of Binance-branded stablecoin BUSD—and the decentralized exchange dYdX.
The decision comes on the heels of February guiding issued by Canada’s securities regulator to force exchanges to register with the agency—failure to meet preregistration requirements means an exchange can no longer operate. It is unclear whether this order contributed to Binance’s decision. A spokesman did not immediately respond to a request for comment.
Not all crypto companies choose the same strategy. Binance’s competitor, US exchange Kraken, signed a pre-registration task with the Ontario Securities Commission on March 30 as a step toward compliance with national guidance.
“Canadian Securities Administrators have set clear expectations on the rules they expect crypto trading platforms to follow,” said Mark Greenberg, Kraken’s managing director for Canada, in a statement shared by luck. “It is for individual companies to make informed decisions whether they want to play by the stated rules of the game, or leave.”
Binance is facing regulatory difficulties around the world as it considers its high status following the collapse of FTX in November, including investigations by US agencies into money laundering violations. In March, the Commodity Futures Trading Commission nabbed Binance and Zhao, who said the exchange illegally offered services to US customers, joined a raft of other lawsuits.
On Thursday, Reported on Information that Binance.US—which the parent company claims operates independently of its international exchange—is exploring ways to reduce Zhao’s stake to reduce further scrutiny. Binance representatives maintained that the company has turned a new leaf from its early days in 2017 — when it rapidly grew into the world’s largest exchange — and is trying to accomplish, such as hiring of the former lawyer of the Department of Justice and Drug Enforcement Agency Noah Perlman as its chief compliance officer.
In its tweet on Friday, Binance expressed optimism that it could return to Canada if the regulatory environment improves.