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Another week of regulatory woes for the crypto industry. Binance, the worlds largest cryptocurrency exchange by trading volume, announced on Friday that it is exiting Canada, citing changes in the countrys regulations.
Unfortunately, due to new guidance on stablecoins and investor restrictions provided to cryptocurrency exchanges, the Canadian market is no longer sustainable for Binance at this time, the company said in a statement on Twitter. rice field.
Unfortunately, today we are announcing that Binance will join other prominent cryptocurrency businesses in actively exiting the Canadian market.
We thank the regulators for working with us to meet the needs of our Canadian users.
Binance (@binance) May 12, 2023
As the tweet put it, Canada had sentimental value to us as the home country of our founder (CEO Changpeng Zhao).
Binance may be the largest, but it is not the first cryptocurrency company to abandon the Canadian market. In February, the Canadian Securities Administration (CSA) released new forecasts regarding the mandatory registration of cryptocurrency platforms in the country, specifically pre-registration applications.
This turned out to be the problem. Competitor exchange OKX pulled out of the Canadian market within a month. Decentralized exchange dYdX soon followed, and last month Paxos, which previously issued the Binance-branded stablecoin BUSD, did as well. Now it’s Binance’s turn.
Withdrawal from the Canadian market itself should not be a big problem. The country represents a small market, as Binance said in a tweet. Canada’s population is about 38 million, slightly smaller than the US state of California.
Nonetheless, the move is concerning because it happened amid a broader regulatory crackdown in the United States. South of the U.S. border, the crypto industry is at odds with regulators, and Canada’s intolerance won’t help matters.
Binance itself has already come under pressure through multiple investigations and complaints in the US.Most Notable are Civil Enforcement Lawsuits It has been submitted The Commodity Futures Trading Commission alleges that Binance and its subsidiaries operate through a deliberately opaque joint venture, adding that it has fundamental compliance measures aimed at preventing and detecting terrorist financing and money laundering. He was accused of neglecting to implement procedures.
This is just one part of a tougher regulatory crackdown in the US. Coinbase and the SEC have been in a war of words, with the former threatening to use the UAE as an international hub last week amid growing hostility in the United States. The exchange has repeatedly lamented the company’s perceived lack of regulatory clarity from lawmakers.
It is important that regulators set policy and enforce it. Enforcement should not start before there are clear rules, Coinbase CEO Brian Armstrong tweeted last week.
I met with the SEC today. We will continue to push for a clear rulebook for cryptocurrency regulation in the United States.
The United States cannot afford to fall behind in this critical technology for updating its financial system.
It is also important that regulators set policies and enforce them. It doesn’t start… pic.twitter.com/EaPD7wDbSx
Brian Armstrong (@brian_armstrong) April 21, 2023
SEC Chairman Gary Gensler responded with applause this week. He argued that speech The rules have already been published, he said at a financial markets conference in Atlanta. There is nothing about new technology[such as cryptocurrencies]that contradicts the public policies that Congress has laid down, he added.
Here are the comments testimony In April, he condemned the collective non-compliance of the cryptocurrency sector before the House Financial Services Committee.
Cryptocurrency intermediaries, whether they call themselves centralized or decentralized, often do not operate normally in other parts of the securities market, such as exchange functions, broker-dealer functions, custody and clearing functions, and lending functions. We offer a combination of services that are segregated from each other.The commingling of various functions within a cryptocurrency intermediary creates inherent conflicts of interest and risks for investors, but these risks and conflicts are addressed by the Commission. are not allowed in other markets.
So while Binance abandoning its relatively small Canadian market may not be the biggest blow in itself, industry players should be concerned about what this might mean going forward. This is exactly the latest regulatory blow in North America, and the industry feels like it’s being pushed overseas.
Cryptocurrency is a technology that could theoretically operate anywhere, but the fact is that the US is the world’s largest financial market, pushing companies offshore and making it far more difficult for customers to access the blockchain world. Inconvenience is not a good thing for space.
Blockchain is often touted as a way around the traditional financial world. As appealing as it may sound to some, it is also (understandably) a source of conflict with the authorities. Additionally, while cryptocurrency branches may be more censorship-resistant and offer a smoother way to move money and store wealth, people still access it from the fiat world in the first place. need to do it. And since the world still pays for food, water, housing, and all other goods and services in fiat currency, it will require repeated bridging between the two to get the money out. For this reason, restricting cryptocurrency exchanges and other onboarding avenues in the U.S. has become a major problem for the industry’s desire to establish itself in the mainstream.
Therefore, the argument that cryptocurrencies can ignore these regulatory issues or seamlessly move abroad without impact may be missing the point. The continued crackdown by North American regulators poses a crisis for the cryptocurrency industry. Canadas ban on Binance is the latest story to highlight just that fact.
