On Friday, Binance, the largest crypto exchange, announced on Twitter that it would be “proactively withdrawing” from Canada.
“We had high hopes for the rest of the Canadian blockchain industry,” the company wrote in a 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.”
Unfortunately, today we are announcing that Binance will be joining other prominent crypto businesses in proactively withdrawing from the Canadian marketplace.
— Binance (@binance) May 12, 2023
We would like to thank those regulators who worked with us collaboratively to address the needs of Canadian users.…
While Canada is a small market for crypto globally, it’s noteworthy as the one-time home of Changpeng Zhao, commonly known as CZ, the cofounder and CEO of Binance. Zhao moved to Vancouver, British Columbia, with his mother and sister from China in 1989 to join his father, who was enrolled in a doctoral program to study geophysics.
Binance joins a longer list of crypto companies that have chosen to leave Canada due to its regulatory environment, including Paxos—the former issuer of the Binance-branded stablecoin BUSD—and the decentralized exchange dYdX.
The decision comes on the heels of February guidance issued by Canada’s securities regulator to compel exchanges to register with the agency—failure to meet preregistration requirements would mean an exchange can no longer operate. It is unclear whether this decree contributed to Binance’s decision. A spokesperson did not immediately respond to a request for comment.
Not every crypto company has chosen the same strategy. Binance’s competitor, the U.S. exchange Kraken, signed a pre-registration undertaking with the Ontario Securities Commission on March 30 as a step toward complying with the national guidance.
“The Canadian Securities Administrators have laid out clear expectations of the rules they expect crypto trading platforms to follow,” said Mark Greenberg, Kraken’s managing director for Canada, in a statement shared with Fortune. “It is for individual companies to make informed decisions on whether they want to play by the stated rules of the game, or leave.”
Binance has faced regulatory difficulties globally as it reckons with its heightened status following November’s collapse of FTX, including investigations by U.S. agencies into money laundering violations. In March, the Commodity Futures Trading Commission sued Binance and Zhao, alleging the exchange was illegally offering services to U.S. customers, along with a raft of other charges.
On Thursday, The Information reported that Binance.US—which the parent company claims operates independently of its international exchange—was exploring ways to reduce Zhao’s stake in order to reduce additional scrutiny. Binance representatives maintain that the company has turned a new leaf from its early days in 2017—when it rapidly grew into the world’s largest exchange—and has made efforts to come into compliance, such as hiring the former Department of Justice and Drug Enforcement Agency lawyer Noah Perlman as its chief compliance officer.
In its tweet on Friday, Binance expressed optimism that it would be able to return to Canada when the regulatory environment improves.
