Is Binance Legal in Canada: Why It Exited the Market

Published: 29th May, 2024 | Last Updated: 30th May, 2024

Markos Koemtzopoulos

Markos Koemtzopoulos is the founder and main writer of ElementalCrypto. He has been a lecturer at the University of Nicosia on cryptocurrencies and DeFi and has taught two courses on crypto and blockchain technology.

Is Binance legal in Canada? Amidst regulatory upheaval, Binance suspended its services in Canada in 2023. This succinct overview introduces readers to the complex regulatory landscape that led to Binance’s pause and what this means for the Canadian crypto community.

Key Takeaways

  • Binance ceased operations in Canada in March 2023 due to new regulations, particularly investor limits on stablecoins, but remains open to returning under favorable regulatory conditions. See Canada Cryptocurrency Regulation.
  • Canadian Securities Administrators’ stringent requirements have significantly influenced the crypto trading landscape, compelling other platforms to adhere closely to the new rules to avoid facing similar challenges as Binance.
  • Despite Binance’s exit, the Canadian digital asset market continues to grow, with local and foreign exchanges ensuring compliance, offering unique services, and enhancing security measures to attract users.

Current Status of Binance in Canada

Binance logo on a blurred background

Binance, once a dominant player in the Canadian market, decided to halt its operations due to new regulatory guidance that made its existence untenable.

The company linked its departure to the enactment of new guidance on stablecoins and investor limits, with investor limits provided being a key factor.

More specifically investors are not able to trade more than $30,000 worth of altcoins in net trading amount over a rolling 12-month period.

In addition, the only stablecoin that is allowed in Canada is USDC.

Binance ceased operations in Canada in March 2023.

Nonetheless, the company remains optimistic about a potential return, demonstrating readiness to cooperate with regulators to adapt to evolving crypto regulations.

Also, see Canada Crypto Ban for a list of exchanges that have exited the market.

The Departure from the Canadian Market

canadian flag, canada, maple

Regulatory Hurdles Faced by Binance

The crux of Binance’s challenge in Canada revolved around regulatory compliance.

Binance Holdings Limited failed to register as a foreign money services business in Canada, bypassing vital compliance steps.

Moreover, the stringent guidelines issued by the Canadian Securities Administrators, particularly around investment limits, played a significant role in Binance’s decision to cease operations in Canada.

New Canadian regulations concerning stablecoins and investor limits were specific triggers for Binance’s withdrawal from the Canadian market.

This withdrawal aligns with Binance’s broader strategy to exit markets where regulatory challenges are significant.

The Ripple Effect on Canadian Users and Crypto Asset Trading Platforms

Canadian users trading crypto assets

Binance’s exit from the Canadian market has had notable ripple effects. Canadian cryptocurrency traders, previously dependent on Binance, have been encouraged to explore alternative trading platforms.

See the best Canadian crypto exchanges for more

This shift in user behavior has the potential to influence the Canadian crypto market landscape significantly.

Simultaneously, other crypto trading platforms in Canada have been put on alert. To avoid Binance’s fate, these platforms must adhere to Canadian securities law.

In response to Binance’s exit, other platforms are cooperating with regulators to implement investor protection measures.

For example, see

Binance, despite facing challenges, remains open to the possibility of re-establishing operations in Canada. They have communicated their interest in re-engaging with the Canadian market given favorable evolutions in regulatory conditions for broader access to digital assets.

Comparing Binance with Other Exchanges Operating in Canada

Comparison of crypto exchanges in Canada

Following Binance’s departure, other exchanges in Canada have surfaced as potential alternatives to the world’s largest cryptocurrency exchange.

One such platform is Coinsquare, which is focused on compliance and regulation in collaboration with the Ontario Securities Commission and other regulatory bodies.

Different exchanges, including crypto exchange platforms and cryptocurrency exchange services, have unique offerings to attract a diverse range of users. Here are some examples:

  • Bitbuy and VirgoCX provide user-friendly platforms suitable for beginners
  • Kraken offers the best security and has never been hacked. See Is Kraken Good in Canada?
  • Coinsmart and Crypto.com market to all levels of traders
  • Bitbuy and Wealthsimple are known for their transparent fee structures
  • Coinbase and Crypto.com offer benefits like earning on holdings and Visa cards with rewards

Currently, there are 10 crypto trading platforms registered in Canada, with another 10 pursuing registration.

Understanding Investor Protection: How Canadian Securities Administrators Influence Crypto Exchanges

One of the key stakeholders is the Canadian Securities Administrators (CSA), a group of canadian regulators.

Composed of securities regulators from all 10 provinces and 3 territories in Canada, the CSA endeavors to ensure investor protection and promote fair and efficient capital markets.

Several notices have been issued by the CSA to unregistered crypto exchanges, some of which are prominent crypto businesses.

These include directives to undertake pre-registration, adhere to commitments, and comply with legal frameworks for crypto assets, including stablecoins.

The CSA has also established an Investor Advisory Panel to include retail investors’ views on policy development.

Such regulatory updates, like the pre-registration process for crypto exchanges, present challenges for companies like Binance in avoiding potential enforcement actions.

These measures underscore the CSA’s commitment to protecting investors and ensuring a fair and secure crypto market.

Binance’s Global Presence Versus Local Regulations

Binance’s global presence is a testament to its success in navigating the complex world of cryptocurrency. To operate legally within various jurisdictions, Binance has established subsidiaries in countries such as Malta, Singapore, and the United States to adhere to local regulatory frameworks. For example, Binance obtained a license from the Malta Financial Services Authority in 2020 to operate within the European Union, and secured a license from the Monetary Authority of Singapore for operations in Singapore.

Binance regulation status per country

However, the company’s journey hasn’t been devoid of challenges. In regions like Japan, Thailand, and Canada, Binance has faced regulatory scrutiny but remains committed to complying with local regulations.

Binance’s withdrawal from specific markets highlights the influence of regulatory requirements on cryptocurrency exchanges. It’s a constant balancing act between global ambitions and local regulations.

Binance global presence

Security Measures and Trust: Evaluating the Safety of Crypto Exchanges

security

Security of transactions and user funds ranks high on the priority list for Binance and other crypto exchanges.

Binance supports two-factor authentication (2FA), intensifying security beyond just a password.

Moreover, the platform employs real-time monitoring of suspicious activities, like 2FA or password resets, withdrawal attempts, and changes in email addresses.

Binance also employs data encryption and secure storage practices to protect transaction information and personal data.

A large portion of client funds are protected in cold storage facilities to reduce the threat of unauthorized access or hacks.

Binance has also established a Secure Asset Fund for Users (SAFU), operating as an emergency reserve to reimburse users in the rare event of a security breach.

Combined, these preventative measures and secure infrastructure contribute significantly to trust-building among Binance’s user base.

CEO Changpeng Zhao’s Stance on Proactively Withdrawing from Markets

Binance does not take the strategic decision to withdraw from specific markets lightly. Its CEO, Changpeng Zhao (CZ), supports the strategy of proactively withdrawing from markets where the company’s operations are deemed untenable due to regulatory challenges.

This decision, albeit difficult, is an essential part of Binance’s commitment to compliance and regulation.

Summary

The Binance saga in Canada is a potent reminder of the complex interplay between cryptocurrency exchanges, regulatory bodies, and market dynamics. While Binance’s exit has left a significant gap in the Canadian market, it has also paved the way for other platforms to step up their game, focusing on compliance and investor protection.

Despite Binance’s absence, the future of digital assets in Canada remains promising, buoyed by established exchanges and new players ready to fill the void. As the world of cryptocurrency continues to evolve, so too will the regulatory landscape, underscoring the need for exchanges to stay agile and adaptable.

Frequently Asked Questions

Is Binance safe to use?

Yes, Binance is considered one of the safest exchanges in the world due to its high level of security and the existence of the SAFU fund, which reimburses users in case of exchange crashes or hacking incidents. It’s a rare feature not found on every platform.

Why did Binance exit the Canadian market?

Binance exited the Canadian market due to new regulatory guidance and operational challenges.

What impact did Binance’s exit have on Canadian users and other crypto trading platforms?

The exit of Binance affected Canadian users, leading them to find alternative trading platforms, while prompting other crypto trading platforms in Canada to prioritize compliance and investor protection. This is important for users to consider when choosing a platform to trade on.

How does the Canadian Securities Administrators influence crypto exchanges?

The Canadian Securities Administrators influence crypto exchanges by issuing guidelines and notices to ensure compliance and investor protection. This helps maintain a fair and secure trading environment for investors.

How has Binance navigated local regulations in different jurisdictions?

Binance has navigated local regulations in different jurisdictions by establishing subsidiaries in countries like Malta, Singapore, and the United States to comply with local regulatory frameworks. This approach allows them to operate within each jurisdiction’s legal requirements.

How can I buy crypto in Canada?

To buy crypto in Canada you need to use a regulated exchange such as Coinsquare, NDAX, or ByBit. See Which Crypto Platform Is Legal in Canada for more.

What is the equivalent of Binance in Canada?

Good alternatives with a large range of cryptocurrencies in Canada are Kraken, Coinbase, and Crypto.com.

What countries allow Binance?

Binance is allowed in all countries outside of Canada.

  • China
  • Japan
  • Italy
  • Philippines
  • United States. In the United States, you can use Binance.us but you cannot deposit US dollars.
  • Australia
  • India

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Markos Koemtzopoulos is the founder and main writer of ElementalCrypto. He has been a lecturer at the University of Nicosia on cryptocurrencies and DeFi and has taught two courses on crypto and blockchain technology.

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