Binance exits Canada amid increased regulation in North America

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Reg­u­la­to­ry hur­dles have once again hit Binance in North Amer­i­ca, with the world’s largest cryp­tocur­ren­cy exchange announc­ing on Fri­day that it would cease oper­a­tions in Cana­da due to tight­ened cryp­to rules.

See relat­ed arti­cle: Binance.US cites ‘hos­tile’ reg­u­la­tor, yanks US$1.3 bil­lion deal to buy Voy­ager Digital

Fast facts

  • Amid height­ened reg­u­la­to­ry over­sight aimed at the cryp­to exchange in the U.S., Binance has now decid­ed to exit the neigh­bor­ing Cana­di­an mar­ket. The com­pa­ny announced in a tweet on Fri­day that it had put off the exit deci­sion as long as pos­si­ble in order to explore ways to pro­tect its Cana­di­an users. But, it said, “it has become appar­ent that there are none.”
  • “We had high hopes for the rest of the Cana­di­an blockchain indus­try,” Binance said in the tweet. “Unfor­tu­nate­ly, new guid­ance relat­ed to sta­ble­coins and investor lim­its pro­vid­ed to cryp­to exchanges makes the Cana­da mar­ket no longer ten­able for Binance at this time.”
  • The com­pa­ny added that, while the Cana­da mar­ket is small, “it held sen­ti­men­tal val­ue” as the home coun­try of its founder Chang­peng Zhao, who is a Cana­di­an citizen.
  • Binance said it is send­ing out emails to Cana­di­an users detail­ing its next steps and how the company’s with­draw­al from the coun­try will impact their accounts.
  • Binance’s exit comes after the Cana­di­an Secu­ri­ties Admin­is­tra­tors reg­u­la­to­ry body said in Feb­ru­ary that cryp­to firms plan­ning to oper­ate in Cana­da must reg­is­ter their com­pli­ance with a new set of reg­u­la­to­ry guidelines.
  • Those guide­lines require cryp­to trad­ing plat­forms to fol­low cus­tody rules, ensure seg­re­ga­tion of cryp­to assets held for local clients and refrain from offer­ing mar­gin, cred­it or oth­er forms of leverage.
  • Fail­ure to com­ply would require com­pa­nies to offload Cana­di­an users and block the jurisdiction.
  • In the U.S., the Com­mod­i­ty Futures Trad­ing Com­mis­sion (CFTC) sued Binance and Zhao in March, for alleged­ly offer­ing unreg­is­tered cryp­tocur­ren­cy deriv­a­tives in the U.S.
  • Zhao reject­ed the CFTC’s alle­ga­tions, say­ing the regulator’s com­plaint “appears to con­tain an incom­plete recita­tion of facts.”

See relat­ed arti­cle: Binance.US may reduce founder Chang­peng Zhao’s own­er­ship stake: The Information



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