On Friday evening, Binance announced that it was halting its operations in Canada due to new regulatory standards that had become too restrictive. After the United States, it seems that this other North American country is scaring away players in the cryptocurrency ecosystem.
Binance leaves Canada for regulatory reasons
It is to believe that cryptocurrencies no longer have their place in North America. After dYdX last month and Paxos, Binance announced Friday evening to withdraw from the Canadian market.
The reason lies in the new regulations in force in the countrywhich imposes too many constraints on the platform for it to be relevant for it to continue to operate there.
Despite a relatively small local market, Binance still evokes sentimental value, given the nationality of its founder. Thus, the platform tried to delay this measure, but believes that this outcome is inevitable :
“Unfortunately, new stablecoin guidelines and investor limits provided to crypto exchanges make the Canadian market more tenable for Binance at this time. We postponed this decision for as long as we could to explore other reasonable ways to protect our Canadian users, but it has become apparent that there are none. »
Affected users will receive an email telling them how to proceed. Binance says it is confident that it will return to Canada one day, and that even if it does not agree with the current regulations, it continues to dialogue with the regulator.
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The consequences of the bankruptcies of 2022
Last February, Canada saw the entry into force of new digital asset regulations.
These new measures, more restrictive than originally, are a direct consequence of the bankruptcies that the ecosystem has experienced since last year. This is at least the argument used to justify them:
“In light of recent insolvencies involving a number of CTPs including Voyager Digital, Celsius Network, FTX Group of Companies, BlockFi and Genesis Global […], we are introducing important new investor protection provisions in the standard pre-registration undertaking form. »
As these rules indicate, it is not only for unregistered platforms not to address Canadian users, they must also take “appropriate measures to identify and separate users in Canada“.
Among the obligations for registered platforms, they must engage third-party custodians to outsource custody of at least 80% of client assets. If this custodian is not regulated in Canada, he must then have obtained the agreement of the regulator of the country to be hired.
All assets considered as financial securities are also prohibited, implying strict investigations to define what falls under this status or not.
By default, stablecoins are considered securitiesbut an exception is made provided that well-defined rules are respected by both the platform and the stablecoin issuer.
If Canada is less talked about than the United States, it seems despite everything that its regulation be at least as difficult for players in the crypto ecosystem to manage.
👉 Also in the news — Crypto exchanges: Changpeng Zhao would seek to reduce his stake in Binance US
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Source: Ontario Securities Commission
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I timidly discovered the world of blockchain at the end of 2018 during my quest for financial freedom. Initially invested moderately, it was only two years later that I took the gamble of betting everything on the movement that was taking shape then. I then dedicate 2021 to training myself better to acquire more knowledge and seriousness. As I often like to say: I still have a billion things to learn. And what I do know, I want to share with you.
Vincent Mayor
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