Number one crypto exchange Binance has folded up in Canada, citing a harsh regulatory environment. The top exchange has been in operation in Canada for many years, but suddenly announced it was moving out of the country for good.
This comes as a huge surprise to Canadian users of the platform when Binance made the announcement on its official Twitter handle. according to the company, recent rules passed by the Canadian government related to stablecoins and investor limits for cryptocurrency operations has made it unreasonable to continue operating in the country.
Unfortunately, today we are announcing that Binance will be joining other prominent crypto businesses in proactively withdrawing from the Canadian marketplace.”
Canada happens to be the home country of Binance founder Changpeng Zhao, and the exchange has worked with local regulators for many years to serve Canadians, but has to leave the country at this point.
We would like to thank those regulators who worked with us collaboratively to address the needs of Canadian users. Albeit a small market, it held sentimental value for us as the home country of our founder,” Binance write in a tweet.
While Binance held off the decision to leave for a long time, all efforts to find alternative avenues of continuing operations failed, hence the decision to move out.
Canada and US Driving Away Crypto
Binance is just one of many crypto companies that have either left the country or limited their operations due to unfriendly regulations. OKX, a crypto exchange that has been expanding the scope of its operations to other jurisdictions also announced it will be shutting down operations in Canada by mid 2023.
Binance is also currently facing issues with regulators in the US, which started with the commodities fututres trading commission (CFTC) suing the company for breaking federal laws. The CFTC is seeking to terminate the exchange’s operations.
Other exchanges such as Coinbase are facing similar pressures, but has decided to fight back by filing a lawsuit asking the securities and exchange commission (SEC) to provide regulations for the crypto industry. The court has since asked the SEC to respond to the suit.
Even though the US has set up a committee to look into creating a regulatory framework for the industry, it isn’t likely that such a framework will become a reality any time soon. This will potentially lead to more companies leaving the country for more friendly climes.
A Push for CBDCs
The regulatory pressure mounted on crypto companies in Canada and the US may seem to be an effort to protect investors, but it may also be in a bid to make room for central bank digital currencies. The US president last year called for a look into crypto, but also asked for research into creating a CBDC.
The government has always considered crypto as a threat to the legacy financial system, and may do anything to prevent them from dominating the US dollar. The case in Canada is similar, with the government seeking public opinion about a CBDC.
The CBDC is to serve as an alternative to cryptocurrencies and provide a convenient alternative way of transacting digitally. Even though the government claims it wishes to bring financial inclusion, the main opposition in the country has kicked against the idea along with the country’s bankers association that believes a CBDC will obliterate commercial banking.