Binance, world’s largest crypto exchange, exits Ontario amid regulatory crackdown – Calgary Herald


One observer says other major platforms likely to follow Binance’s lead and simply exit the Canadian market

Author of the article:

The Logic

The Logic

Claire Brownell

Binance is the first major international cryptocurrency exchange to exit a Canadian jurisdiction in the midst of a regulatory crackdown on the sector.
Binance is the first major international cryptocurrency exchange to exit a Canadian jurisdiction in the midst of a regulatory crackdown on the sector. Photo by Reuters/Darrin Zammit Lupi/File Photo

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Binance, the world’s largest cryptocurrency exchange by volume, is exiting Ontario as of midnight Eastern time Saturday, asking all users based in the province to close out active positions by Dec. 31.

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“Regrettably, Binance can no longer continue to service Ontario-based users,” reads a post on the company’s website. “We apologize for any inconvenience caused. Thanks for your support!”

The move comes amidst a crackdown on the sector by Canadian securities regulators, which they announced one week after The Logic reported on an explosion of cryptocurrency trading platforms offering their services to Canadians without being registered as dealers. Binance, which is reportedly incorporated in the Cayman Islands, is the first major foreign firm to respond to the stricter regulatory environment by pulling out of a Canadian jurisdiction.

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A spokesperson for Binance responded to a request for comment with a statement that was nearly identical to the one posted on the company’s website and did not answer when asked why it was pulling out of Ontario and not other Canadian jurisdictions. The Ontario Securities Commission did not immediately respond to a request for comment.

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“To date, we hadn’t seen a dominant major international player see any action brought to them by the regulator or decide not to comply with the proposed requirements,” said Brian Mosoff, chief executive of the cryptocurrency investment company Ether Capital. “The reason this is a big deal is this is the first.”

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Binance—founded by Chinese-Canadian Changpeng Zhao, who studied computer science at Montreal’s McGill University—is known for offering a dizzying array of tokens, some of which offer leverage and other complex financial attributes. In a filing with the U.S. Securities and Exchange Commission earlier this year, competitor Coinbase alleged the company ignores licensing requirements in the U.S. “seemingly without penalty.” The U.S. Justice Department, Internal Revenue Service and Commodity Futures Trading Commission are all reportedly investigating the firm.

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Binance has been making moves to improve its regulatory compliance, partnering with blockchain analytics firms on anti-money laundering measures.

The OSC has initiated enforcement action against three other foreign platforms it says failed to meet a spring deadline it imposed for starting the registration process: Poloniex, KuCoin and Bybit. Regulators have limited tools for enforcing regulations against foreign companies, but in an interview with The Logic in March, Canadian Securities Administrators chair Louis Morisset said they would consider enlisting major credit-card providers to block payments to platforms that refuse to comply.

Mosoff said other major platforms will likely follow Binance’s lead and simply exit the Canadian market, however. Mosoff said he thinks Canada is overall worse off for the platform’s exit, but it might give the country’s domestic cryptocurrency trading platforms a boost.

“It’s good for platforms that do want to comply, because it removes a major competitor,” Mosoff said. “What you’re seeing is an opportunity for Canadian platforms.”

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