Binance quits Canada in the face of new cryptocurrency restrictions
The whole cryptocurrency market is swaying from side to side, at ease in small ranges and with rounded curves. After the fallout from the FTX in 2022, confidence in such currencies was destroyed, and the market completely swung downward with no indications of moderating.
However, major digital currencies like Bitcoin and Ethereum received a new start in 2023, and the crypto market has gradually begun to turn positive due to the relaxed macroeconomic environment and declining inflation. However, the mood of the market has been shifting from “fear” to “greed” and now to “neutral.” The bitcoin market is notoriously unpredictable and volatile in this way. The cryptocurrency market, which displayed some degree of firmness and stability last month, is again exhibiting trepidation as markets are extremely agitated about the rate rises in the U.S. and their effect on liquidity. According to CoinMarketCap, the biggest cryptocurrency by market capitalization was now selling for $29,150, down 1% over the previous day.
Weeks after the nation established several new rules for cryptocurrency exchanges, including investor limitations and required registrations, Binance said on Friday that it was leaving Canada. With establishing a pre-registration procedure, Canada has recently tightened laws for sites that trade crypto assets. The Ontario Securities Commission’s website states that firms that break the laws may be subject to enforcement action. “Unfortunately, (the) new guidance related to stablecoins and investor limits provided to crypto exchanges makes the Canada market no longer tenable for Binance at this time,” Binance stated in a tweet.
Binance stated that it disagrees with the most recent recommendations and intends to cooperate with Canadian regulators to develop a thorough framework for crypto operations there. According to the cryptocurrency exchange, established by Canadian Changpeng Zhao, “We are confident that we will someday return to the market when Canadian users once again have the freedom to access a wider suite of digital assets.” The collapse of Binance competitor FTX in November, which led to a market crash in the values of the main digital currencies, has put the digital assets industry in the sights of authorities worldwide.
In 2022, cryptocurrency, notorious for its high volatility, experienced a turbulent year. The failure of FTX, one of the biggest cryptocurrency exchanges on the planet, is the main cause of the market’s slump. In addition to causing a significant market sell-off, FTX’s bankruptcy and dispute with Binance have decreased liquidity in the cryptocurrency market. The biggest cryptocurrency exchange in the world, Binance, had plans to acquire rival FTX, but it was after discovering several problems with FTX’s finances and regulatory inquiries. Bitcoin fell to its lowest point in two years due to Binance’s move, which reached $69,000 in November 2021. These unexpected developments caused the crypto business to experience upheaval, which in turn caused a high degree of suspicion and mistrust among investors against centralized crypto organizations and on the regulation front. The FTX contagion effect is clear, and there are already concerns raised about the viability of other trading and lending companies like Gemini and Coinbase. According to experts, their administration, governance, and regulating procedures are essential to their existence. The rise in interest rates and the recent hawkish tone of the U.S. Federal Reserve’s stricter monetary policy has also gasoline the fire in addition to the FTX’s abrupt downfall and cascading effect.
Tighter regulations for disclosures on how the crypto businesses operate and retain client cash were required by politicians and securities regulators after the crypto winter of 2022, which erased more than a trillion dollars off the industry’s market worth. In March, the U.S. Commodity Futures Trading Commission sued Binance and its CEO Zhao for running what the regulator claimed was an “illegal” exchange and a “sham” compliance program.
