Canadian regulator criticizes Binance after exchange reports it may operate in region: ‘unacceptable’

Recently, the Binance cryptocurrency exchange announced to users in Ontario, Canada’s largest province, that they would no longer need to close their accounts. This is because the company had obtained authorization to operate in the region.

However, after that, the Ontario Securities Commission criticized the platform for “unacceptable” behavior.

Binance is not registered under the Ontario securities law

In a note, the regulator clarified that Binance does not have registration in the country.

“The Ontario Securities Commission (OSC) is notifying investors that Binance is not registered under the Ontario securities law. This means that they are not authorized to offer trading in derivatives or securities to people or companies located in the province”, the note says.

According to the regulator, Binance notified it that no new transactions from Ontario residents would take place after December 31.

But later, the company issued a new notice to users, without notifying the OSC, terminating this commitment: “This is unacceptable. No entity in the Binance group of companies has any form of bond registration in Ontario.”

The regulator also said that unregistered platforms operating in the region could be subject to lawsuits. This includes temporary orders to ensure compliance, which can affect your business operations.

Finally, the OSC says that crypto platforms intending to obtain registration to operate in the locality must be aware that “the misrepresentation of their registration status raises concerns about the suitability of the company and its principles for registration”.

Understand the case

In June 2021, Binance told Ontario users that their accounts would be closed by the end of the year.

This occurred after the exchange was notified by the OSC for not complying with local securities laws.

But earlier this week, Binance announced it had resolved regulatory issues to continue operating.

More precisely, the platform reported that it had registered as a financial services company (MSB) with the Canadian anti-money laundering authority FinTrac.

In its announcement, Binance referred to “continuous and positive cooperation with Canadian regulators”.

What Binance Answered

After the new OSC note, a Binance representative told:

“Unfortunately, there was a communication error. Earlier in the week, we notified users in Ontario that they did not need to close their accounts until December 31, 2021, following discussions with Canada’s Investment Industry Regulatory Organization and the Alberta Securities Commission about Canadian-wide registration. However, we have not met directly with the Ontario Securities Commission about our intentions. This was clearly a bug we are fixing. We will provide updated guidance to users as soon as possible.”