Binance Canada Exit Leaves Crypto Community Split

In response to Binance’s withdrawal from Canada, the crypto community blames regulators, and the exchange for the move.

Man arguing with himself infont of Binace's Canadian HQ, one of him splits into RGB colours.
Created by Gabor Kovacs from DailyCoin
  • Binance choosing to withdraw from Canada drew strong reactions from the community. 
  • While many blame Canadian regulators, others draw different conclusions. 
  • Binance has been under increasing regulatory scrutiny globally since the FTX crash. 

In the aftermath of the FTX collapse, global regulators are tightening their grip on the crypto industry. On the other side of these regulations are crypto exchanges like Binance. In a development that has sent shockwaves through the industry, Binance has decided to leave Canada.

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This move has sparked a heated debate, both within the crypto community and in the broader tech and finance community. The public response was split between the criticism of Canada for its stiff approach and Binance’s lack of transparency. 

Crypto Community Split on Binance Leaving Canada

After facing increased global scrutiny, the largest global exchange revealed its decision on Friday, May 12. Since the collapse of FTX, Binance encountered regulatory challenges in numerous countries

The exit from Canada, however, has struck a particular chord because Binance’s founder and CEO, Changpeng “CZ” Zhao, holds Canadian citizenship. 

Critics of the move were quick to voice their discontent. Multiple users claimed that Canada’s crypto regulations stifle innovation in the space. “Canada becomes worse and worse every day,” one user complained. 

Canadian regulators are toxic to the growth of crypto. Period. Full stop,” another crypto enthusiast replied in response to the news.

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The statement captures a growing frustration among certain segments of the crypto community about what they see as anti-crypto regulation. Crypto supporters are increasingly complaining about countries like Canada and US for their regulatory stance on crypto. 

However, not all reactions were adverse. Some users saw this as an opportunity to pivot towards decentralized finance (DeFi). “This just proves we need to start using DeFi more instead of TradFi for crypto,” one user said in response. 

Responses like these echo calls since the FTX collapse to move towards more decentralized financial solutions. Many crypto supporters argued that FTX was a failure of centralization, not crypto. 

Binance Critics Point to Lack of Transparency

Not all users were critical of Canada, however. Some blamed the development on Binance itself. For instance, one user suggested that Binance practice more transparency in its operations. “Why is Binance afraid of regulators?” one user asked. 

Binance has been on the receiving end of criticism over a lack of transparency for years. At the same time, the exchange also ran into regulatory issues in several countries. For instance, in April, Binance Australia lost its derivatives license after a targeted review. Also in April, Binance finally returned to Japan after years of absence due to compliance issues. 

In March, the U.S. Commodity and Futures Trading Commission sued Binance and CZ for operating an illegal exchange. Since the CFTC lawsuit, Binance US has found it difficult to find banking partners in the country. 

On the Flipside

  • As Binance leaves the country, other exchanges will fill the void and take its market share. 
  • In September 2021, Canada’s financial regulator banned Tether (USDT), a controversial crypto asset and the largest stablecoin. 

Why You Should Care

Binance’s exit from Canada means that crypto traders in the country don’t have access to the largest crypto exchange in the world. 

Read more about Binance’s practices that have raised questions lately: 

Binance’s Commingling of Funds: A Wake-Up Call for Better Crypto Regulations

Read about the latest upgrade to the Bitcoin Cash (BCH) network: 

What Is the Bitcoin Cash ‘Ethereum Killer’ Hard Fork?

This article is for information purposes only and should not be considered trading or investment advice. Nothing herein shall be construed as financial, legal, or tax advice. Trading forex, cryptocurrencies, and CFDs pose a considerable risk of loss.

Author
David Marsanic

David Marsanic is a journalist for DailyCoin who covers the intersection of crypto, traditional finance, and government. He focuses on institutionalized crypto entities like major cryptocurrency exchanges and Solana, breaking down complex topics into easy-to-understand writing. David's prior experience as a business journalist at various crypto and traditional news sites has enabled him to maintain a critical approach to news while adhering to high journalistic integrity standards.