Binance, one of the world’s largest cryptocurrency exchanges, announced in the evening that it will withdraw from Canada after a set of new guidelines for crypto-asset trading platforms in the country take effect. Binance, founded by Canadian citizen Changpeng Zhao, said that new guidelines on stablecoins and investor limits make the Canadian market “no longer defensible” for the exchange at the moment. Here are the details…
Binance will no longer operate in Canada
Over the past months, Canada has tightened regulations on crypto-asset trading platforms, including initiating a pre-registration process. Companies that don’t follow the rules will face potential sanctions, according to the Ontario Securities Commission’s website. However, Binance said it did not agree with the final rules and hopes to work with Canadian regulators to create a comprehensive framework for crypto operations in the country.
“We are confident that we will one day return to the market when Canadian users once again have the freedom to access a broad suite of crypto assets,” the company said in a statement. The move comes as the crypto-assets industry faces increasing scrutiny from regulators around the world, particularly after the collapse of Binance rival FTX in November. As we reported on Kriptokoin.com, the FTX collapse triggered a market collapse in the prices of the largest cryptocurrencies. Following the start of the crypto winter of 2022, which wiped out more than a trillion dollars from the market capitalization of the industry, lawmakers and securities regulators demanded tighter rules for disclosures on how crypto companies operate and hold client funds.
The exchange had difficulties with some regulators
Having faced legal challenges in the past, Binance was sued in March by the US Commodity Futures Trading Commission over the regulator’s allegation of an “illegal” exchange. The company has also faced regulatory challenges in other countries, including the UK and Japan. Now, the announcement by Binance has been met with mixed reactions from the crypto community. Some criticized the move as a “sign of weakness”, while others praised the company for taking a stand against “overly burdensome” regulations.
A spokesperson for the Canadian Blockchain Association said, “It is unfortunate to see Binance leave the Canadian market. But we understand their decision,” he said. “We hope that Canadian regulators will work with Binance and other crypto-asset trading platforms to create a regulatory framework that is both effective and fair,” they added.
Despite the challenges facing the industry, many analysts remain bullish on the long-term prospects of cryptocurrencies. As more institutional investors and companies enter this space and Blockchain technology continues to evolve, the future of crypto assets looks bright. However, it remains unclear how regulators will balance the need for consumer protection with a desire to drive innovation and growth in the industry.
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