• Canada now requires crypto businesses to pre-register or face potential enforcement action
  • The country's new crypto rule classifies stablecoins as a security
  • OKX pulled out from Canada in March, while stablecoin issuer Paxos left the country in April

Binance, the world's largest centralized cryptocurrency exchange (CEX) platform by trading volume, is joining the growing list of crypto businesses leaving Canada as it feels the market condition there is "no longer tenable."

Changpeng Zhao (CZ), the founder and CEO of Binance, is a Canadian, but that did not stop the exchange from leaving the Great White North because of its much stricter cryptocurrency regulations.

"Albeit a small market, it held sentimental value for us as the home country of our founder," Binance tweeted, adding that it "had high hopes for the rest of the Canadian blockchain industry."

However, changes introduced in the country's crypto rules made it challenging for the exchange to continue operations since the regulation now includes investor limits on CEXs and new stablecoin-related guidance.

"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," it noted.

The exchange also shared that it tried to explore viable options to protect its Canadian customers but it has exhausted potential alternatives and there is nothing more it can do but to stop doing business in the country.

"We put off this decision as long as we could to explore other reasonable avenues to protect our Canadian users, but it has become apparent that there are none," the exchange further said.

Canada has stiffened its regulations for cryptocurrency trading platforms over the past months and has introduced a pre-registration process. Companies failing to abide by the new rules could face enforcement action from authorities.

The new rules classify stablecoins as a security and restrict businesses "from permitting Canadian clients to enter into crypto contracts to buy and sell any crypto asset that is itself a security and/or a derivative."

"Unregistered platforms operating in Ontario that are non-compliant may be included on the OSC Investor Warnings and alerts page and subject to regulatory action, including temporary orders," the Ontario Securities Commission (OSC) said.

Binance also mentioned that while it does not agree with Canada's latest rules, it hopes to work with the country's regulators to weave a comprehensive framework for cryptocurrency regulations in the second-largest country in the world in terms of area.

"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," said the exchange.

As for its Canadian users, the exchange has already sent an email containing "comprehensive information on how this will impact their accounts going forward." The users should close their open positions by Sept. 30, since "from October 1st, 2023, Canadian customers will be put into liquidation-only mode."

Binance has now joined other crypto businesses leaving the country. In April, decentralized crypto exchange (DEX) dydX and stablecoin issuer Paxos ended their operations in the country.

In March, centralized crypto exchange OKX pulled out from the Canadian market.

A composition showing crypto currency with the Binance logo