Cryptocurrency exchange Binance Holdings Ltd. said it is withdrawing from Canada, arguing that regulatory restrictions in the country have made its business “untenable.”
In a statement issued Friday, Binance, which is widely believed to be the world’s largest crypto firm, said it had put off the decision for as long as possible to find “reasonable avenues” for its Canadian users. Ultimately, however, it determined there were none.
Investor limits from Canadian regulators and rules against so-called stablecoins have made business in the country no longer feasible, Binance said. The company has already been restricted by provincial authorities in Ontario, which hosts Canada’s largest marketplace for crypto users. Other provinces were also looking to limit the platform.
In recent months, Canadian securities commissions have been clamping down on crypto companies – domestic and foreign – that are operating in the country. The watchdogs began to announce sharper language late last year, after significant implosions and high-profile bankruptcies hit some of the crypto sector’s largest players, including FTX Trading Ltd. and Celsius Network LLC.
The new rules ask investors to steer clear of stablecoins, which are digital assets pegged against currencies such as the dollar. They have also warned all companies to register with the regulators within the jurisdictions they wish to operate.
This has drawn ire from some international crypto companies, who have for weeks been warning of exiting the country’s markets. But regulators, in particular the Canadian Securities Administrators, an umbrella organization representing the country’s provincial and territorial authorities, have stated they are no longer going to be lenient. If rules aren’t followed, enforcement action will be taken, the CSA has said.
Binance spokesperson Nazmul Islam said the company will not be answering any questions beyond its statement, which was posted to social media.
Canada is a small market, but it holds “sentimental value” because Chinese-born Binance founder Changpeng Zhao was raised in the country, the company stated. Binance was initially based out of China, but has since said it does not have any physical headquarters.
Reacting to Friday’s news, Mark Greenberg, managing director for Canada at San Francisco-based Kraken Digital Asset Exchange, a competitor of Binance, said it intends to follow all rules in the country.
“The Canadian Securities Administrators have laid out clear expectations of the rules they expect crypto trading platforms to follow. We’ve had a positive relationship with Canadian regulators for several years,” Mr. Greenberg told The Globe and Mail. “It is for individual companies to make informed decisions on whether they want to play by the stated rules of the game, or leave.”
Canadian users of the crypto platform received an e-mail from Binance about how the company’s move will affect their accounts, through which they bought and traded digital assets such as bitcoin.
It remains unclear, however, if their funds may be accessible. Some customers took to social media Friday to share that they have been unable to withdraw their assets from Binance wallets.
The company said it will continue to watch regulatory action in Canada from afar. “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,” Binance stated.
Temur Durrani