On Friday, Binance, the world’s largest cryptocurrency exchange, announced its exit from the Canadian market, citing new guidelines on stablecoins that have made it untenable for the company to continue operations there.
The new rules require exchanges to seek approval before allowing their customers to buy or deposit stablecoins, a requirement that has led to further due diligence checks for exchanges amid tightening regulatory scrutiny.
Binance has stated that it had put off this decision as long as it could to explore other reasonable avenues to protect its Canadian users. Despite not agreeing with the new guidance, the company hopes to continue to engage with Canadian regulators aimed at a thoughtful, comprehensive regulatory framework.
Binance is a major player in the cryptocurrency industry and has been seeking regulatory approval in most of the jurisdictions that it offers its services. It has also been one of the main advocates of more regulatory clarity across the globe. However, its decision to exit Canada comes a few months after the Canadian Securities Administrators (CSA) outlined new guidance regarding stablecoins.
The exit of Binance from Canada is a significant move that highlights the challenges facing cryptocurrency exchanges in complying with regulatory requirements. The scrutiny of stablecoins by regulators is not unique to Canada, and other jurisdictions are also closely monitoring this area.
In the coming months, it’s expected that more exchanges will face similar challenges, and the industry will need to be prepared to navigate these hurdles.