Binance users in Canada are receiving mixed signals on whether the exchange will operate in the country.
Binance informed Ontario users this week that they don’t need to close their accounts at the end of the year
On December 29, Binance users in the province of Ontario began flagging updates they received from the exchange. Updates say they don’t need to close accounts in December anymore. According to The Block, the Ontario Securities Commission released a statement without any certainty: “Binance is not registered in Ontario.”
“This is unacceptable,” the announcement continued. “There is no legal entity in the Binance group of companies holding any form of securities registration in Ontario.”
Binance bases its statement on its current registration as a money services business with the Canadian anti-money laundering agency, FinTrac. FinTrac is a federal MSB regulator, unlike in the United States, where most crypto exchanges operate based on MSB registration with different state custodians. Binance mentioned its “active and ongoing cooperation with Canadian regulators in its announcement.” The company added its MSB license “allows us to continue operating in Canada and continue doing business in Ontario while we are fully registered.”
At the time, the meaning of “fully registered” was not clear. A Binance representative told The Block that “we are registering with IIROC to become a Canadian stock and derivatives dealer.” IIROC is the Investment Industry Regulatory Organization of Canada, a self-regulatory organization.
“It couldn’t be, there was a miscommunication. Earlier this week, we informed our users in Ontario that they do not need to close their accounts by December 31, 2021 after discussions with the Investment Industry Authority of Canada and the Alberta Securities Commission. about registrations across Canada. However, we did not meet directly with the Ontario Securities Commission about our intentions, which was clearly an error of which we are colleagues. We will provide updated instructions to users as soon as possible,” a representative from Binance told The Block.
Binance took steps to terminate access in Ontario in June of this year in response to a Canada-wide policy of restricting cryptocurrency trading to exchanges registered with the securities authority.
Canadian securities regulators began cracking down on custodial exchanges earlier this year. The working principle is that the custodial account represents securities agreements with cryptocurrency exchanges, even if the cryptocurrency involved is not necessarily a security.
A similar controversy took place this month in Singapore. In that language, Binance operated both through the global exchange and through a branch of Binance Singapore, both of which did not have the necessary registration to offer crypto trading.
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