- Binance is being investigated by the Ontario Securities Commission over its conduct in Canada
- The exchange announced two weeks ago that it was quitting Canada, but the OSC is still seeking data on its operations
- Binance has had a rocky relationship with Canadian authorities over the years
Binance may have quit Canada but its activities while it was serving Canadian users are being investigated by the country’s biggest regulator, the Ontario Securities Commission (OSC). The exchange giant announced its decision to quit Canada two weeks ago following changes to the way that cryptocurrencies are regulated in Canada, but the OSC is said to be investigating its conduct during its time there. The regulator is attempting to use its powers to compel Binance and potentially third parties to produce pertinent documents and data, but Binance wants the request to be quashed.
Canada’s Tough Line
The Canadian Securities Administrators updated its regulatory rulebook in December, stating at the time that it was “strengthening its approach to oversight of crypto trading platforms” following the collapse of FTX and the prior collapse of QuadrigaCX. This included a margin trading ban, new preregistration undertakings and added restrictions around stablecoins.
Alongside this ban, it also required exchanges to keep customers’ funds with an “appropriate custodian” to ensure there was no commingling of company and user funds, as happened with FTX.
Binance in the Crosshairs
Binance informed users on May 12 that it was leaving the country because it couldn’t comply with the new laws, but that hasn’t stopped the OSC from investigating its activities, telling customers that, “Unfortunately, new guidance related to stablecoins and investor limits provided to crypto exchanges makes the Canada market no longer tenable for Binance at this time.”
Its pledge to leave the country hasn’t let it off the hook, however, with a document released by the Ontario Securities Commission (OSC) revealing that the country’s largest regulatory body is investigating Binance’s activities within Canada. The documents indicate that the OSC wants to obtain documents and data from Binance and potentially third parties relating to how Binance has been operating in the country.
Binance is currently seeking to dismiss these efforts, claiming that a previous agreement with the OSC in 2022, known as an undertaking, prevents the regulator from taking enforcement actions based on past conduct. Binance had previously engaged in disputes with the OSC in 2021 and 2022 regarding its ability to serve Canadian clients.