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Crypto Exchange Binance 'Not Authorized' to Operate in Ontario, Says Regulator

The Ontario Securities Commission has denied that crypto exchange Binance can continue its operations in the province.

3 min read
Crypto in Canada. Image: Shutterstock

Binance, the world’s largest crypto exchange in terms of trading volume, isn’t authorized to operate in Ontario, according to the province’s securities regulator.

In a statement, the Ontario Securities Commission (OSC) notified investors that Binance is not registered under securities law in Ontario.

“This means they are not authorized to offer trading in derivatives or securities to persons or companies located in the province,” reads the press release.

The OSC’s statement came after Binance users in Ontario received emails earlier this week, saying that the exchange would be able to continue to operate in Canada’s most populous province.

“As a result of ongoing and positive cooperation with Canadian regulators, Binance in Canada has been successful in taking its first steps on the regulatory path by registering as a Money Service Provider with FinTrac,” said Binance.

The exchange added that “there is no need for Ontario users to close their accounts by December 31, 2021.”

The notification received by Binance’s Ontario users most likely stems from the exchange’s Canadian entity last week’s registration as a money services business with FinTrac, Canada's anti-money laundering authority.

Canada’s crackdown on unregistered crypto exchanges

In June, after the OSC moved to restrict trading on centralized crypto exchanges that offer derivatives products, including Poloniex, ByBit, and KuCoin, Binance informed its Ontario-based users that they had to close all active positions by the end of the year.

“Binance represented to OSC Staff that no new transactions involving Ontario residents would occur after December 31, 2021. Binance has issued a notice to users, without any notification to the OSC, rescinding this commitment. This is unacceptable,” the OSC said.

The agency stressed that “no entity in the Binance group of companies holds any form of securities registration in Ontario.”

The Canadian Securities Administrators, an umbrella organization of Canada's provincial and territorial securities regulators, currently lists six crypto trading platforms registered both nationwide and in Ontario. These include Wealthsimple, Coinberry, Netcoins, CoinSmart, Fidelity, and Bitbuy.

The OSC’s latest statement is another setback to Binance, which has faced pushback from regulators across the globe over the past year. In August, the UK’s Financial Conduct Authority stated that Binance’s UK entity was “not capable of being effectively supervised,” though that hasn’t stopped the exchange from once again attempting to gain a license in the country.

In September, Singapore’s MAS added Binance.com to its Investor Alert List, which includes entities that "may have been wrongly perceived as being licensed or regulated by MAS." Some jurisdictions, such as Malaysia, have even launched enforcement action against Binance for allegedly operating illegally in the country.

On a more positive note, Binance recently made an important step towards becoming a fully-regulated crypto exchange after receiving “in-principle approval” from the Central Bank of Bahrain.

Last week, Binance also signed a Memorandum of Understanding with the Dubai World Trade Centre Authority with the aim of establishing an industry hub in Dubai.

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