Binance says new regulations in Canada have forced it to exit that country’s crypto market.
“We had high hopes for the rest of the Canadian blockchain industry,” the world’s largest crypto exchange said in a statement posted on Twitter on Friday (May 12).
“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 said it postponed the decision while it looked for other “reasonable avenues” to protect its customers but determined no such path exists.
The statement also notes that Canada is a relatively small market for Binance, but a “sentimental” one, as founder Chanpeng Zhao spent his younger years in the country.
“While we do not agree with the new guidance, we hope to continue to engage with Canadian regulators aimed at a thoughtful, comprehensive regulatory framework,” Binance said. “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.”
Canada introduced stricter rules for cryptocurrency companies last year following the collapse of the FTX exchange.
In February, the Canadian Securities Administrators (CSA) gave unregistered companies a 30-day deadline to register in Canada or leave.
As PYMNTS wrote, Canada’s regulations require platforms to keep Canadian clients’ assets with an appropriate custodian and “segregate these assets from the platform’s proprietary business.” The rules also ban offering margin or leverage for any Canadian customer.
Binance’s move comes as cryptocurrency companies are warning that the regulatory environment in the U.S. is forcing companies to look beyond America’s borders.
Among them is Ripple CEO Brad Garlinghouse, who said earlier this month that the U.S. is being passed by other countries in terms of policies that promote innovation.
“I find it — as a company that started in the United States, as someone who is a U.S. citizen — it’s sad, like I have sadness about this,” Garlinghouse told CNBC. “The U.S. is getting passed, not just a little bit, but by a lot.”
Another crypto firm, Coinbase, is reportedly setting up operations in the United Arab Emirates (UAE) amid regulatory pressure in the U.S.
“We are looking for a home to set up an international hub that could serve the long tail of countries in the world,” CEO Brian Armstrong said in a Bloomberg TV interview.
However, Armstrong said Coinbase still thinks of the U.S. as a key market and has no intention of leaving the country, despite what he says is a lack of clarity on the country’s crypto regulation.
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