Binance, the world’s largest crypto trading platform by daily trading volume, is joining other crypto businesses to pull out of the Canadian market amid mounting regulatory pressure.
Announcing its exit via Twitter on Friday, Binance said that though it was hopeful for the rest of the Canadian blockchain industry, “new guidance related to stablecoins and investor limits … makes the Canada market no longer tenable for Binance at this time.”
Binance’s country manager for Canada resigned last month.
In a move to prevent another FTX collapse, the Canadian Securities Administrators (CSA) is levying more restrictions on crypto trading platforms in the country. Among those changes include prohibiting exchanges from permitting users to buy or deposit stablecoins or proprietary tokens “without the prior written consent of the CSA.”
These stricter rules have put the squeeze on crypto businesses as they navigate new compliance standards in a volatile crypto market. This has pushed out the likes of Paxos and OKX, which both announced their exits from Canada in April, and now Binance.
Founded by Changpeng Zhao (CZ) in 2017, Binance is a cryptocurrency exchange that claims to have amassed over 120 million users globally. In addition to operating its trading platform, its other business lines include an NFT marketplace, its own token, staking services, and a blockchain named Binance Smart Chain, among others.
Though Binance was initially established in China, it has ties with Canada. Zhao was raised in Canada and graduated from McGill University.
Exiting from Canada comes after years of Binance’s turbulent relationship with regulators in the country and beyond.
In 2021, Binance announced it was pulling out of Ontario as regulators began cracking down on unregistered crypto platforms. Binance was not among the six crypto trading platforms registered with the province at the time, and registration was required to continue its Ontario business.
Binance has since received similar notices from other countries like the United Kingdom, the Cayman Islands, Thailand, Hong Kong, and Singapore, in all of which Binance either paused trading for users or permanently shut down operations as it lacked the required licensing.
Despite its departure from Ontario, Binance continued operating in Canada and headed west. In 2022, it incorporated in Alberta and hired two executives who both had previous experience working at Canadian securities regulators.
As part of its broader strategy to expand in Canada, Binance hired Lawrence Truong as its vice-president and country general manager and Darren Gross as its compliance director based in Calgary.
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Gross has worked as an enforcement counsel at the Alberta Securities Commission (ASC) and the Investment Industry Regulatory Organization of Canada (IIROC). Truong was previously a regulatory analyst at the ASC and served as the chief compliance officer of Coinsquare, which is now merging with fellow Canadian crypto businesses WonderFi and CoinSmart.
A month before Binance announced its exit from the Canadian market, Truong announced his resignation from Binance.
Binance has also faced recent scrutiny from the United States. In March, the US Commodity Futures Trading Commission filed a lawsuit against Zhao and Binance for alleged “willful evasion of US law.”
In its complaint, the US markets regulator claims that Binance is operated through an “intentionally opaque common enterprise,” choosing to “knowingly disregard” provisions laid out in the Commodity Exchange Act.
As Binance has opted to leave markets rather than comply with stricter rules around crypto trading, some platforms, on the other hand, have decided to work with regulators.
Last month, ten crypto trading platforms made commitments to pre-register with the Canadian Securities Administrator by the March 24 deadline, allowing them to operate in Canada as they pursue registration. These platforms include US-based companies Coinbase, Kraken, and Gemini, as well as Montréal-based startup Shakepay.
Binance had also filed a pre-registration undertaking (PRU) with the ASC and CSA, with plans to launch a trading platform made specifically for Canada, though this filing was made after the March cut-off date.
The CSA has provided no details regarding its future treatment of crypto platforms that failed to file by the deadline or filed PRUs that are not ultimately accepted.
Featured image courtesy Binance.
