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Crypto News: The world’s largest cryptocurrency exchange, Binance, has recently come under the regulatory spotlight once again as it faces investigation from the Ontario Securities Commission (OSC) in Canada. The OSC is seeking to determine whether Binance attempted to bypass local regulations and compliance controls while seeking approvals to operate in the country. In response to the investigation order, Binance had earlier announced its decision to withdraw from the Canadian market, citing new regulatory guidance concerning stablecoins and investor limits.
Binance’s Compliance With Local Regulations Questioned
The investigation order, served on May 10, authorized an extensive inquiry into whether Binance violated Ontario securities law or engaged in conduct contrary to the public interest. Binance’s legal representation, Borden Ladner Gervais LLP, stated in a filing that the order is broad and aims to investigate any potential circumvention of securities law and compliance controls by Binance.com. The impetus for the investigation order was reportedly the lawsuit filed by the US Commodity Futures Trading Commission (CFTC) against Binance and its CEO Changpeng Zhao (CZ).
Read More: Binance CEO “CZ” Discusses UAE Plans, Bitcoin Mining, Meme Coins In AMA
Despite its global expansion efforts, including launching in markets such as the UAE and Thailand, Binance has encountered mounting challenges in regulatory and legal scrutiny across multiple jurisdictions in recent times. The exchange has been subject to lawsuits, investigations, and increased oversight by regulatory bodies. The OSC’s investigation order further adds to the list of legal issues the exchange must address.
Binance Exits Canada 2 Days After Investigation Ordered
When questioned about the decision to exit the Canadian market, CZ — who is a Canadian citizen — explained during a Twitter Space session that operating a financially viable business in Canada became unfeasible due to the new regulations and associated costs.
Binance’s withdrawal reflects the challenges posed by Canada’s strengthened rules for cryptocurrency companies, introduced in response to the collapse of crypto giant FTX last year. Other major exchanges, such as OKX and Bybit, have also withdrawn from the Canadian market, while Coinbase Global Inc. has chosen to stay and pursue registration under the new regulations.
The OSC has subsequently issued summons to the Binance exchange, demanding the submission of documents related to the investigation. Binance argued that the summons lacked specificity regarding the required information and thus could not be fully complied with. However, the Capital Markets Tribunal ruled in favor of the OSC, ordering Binance to comply with the summons during a hearing on May 26.
However, Binance has argued that the investigation order should be revoked due to a settlement agreement signed with the OSC in 2022, which related to the exchange’s activities in Canada. According to Binance, the agreement promised that the OSC would not initiate further investigations while the exchange was in the process of seeking registration.
The Tribunal is supposed to hold a further hearing on the matter of jurisdiction on June 2, as Binance continues to navigate its legal challenges in Canada and other jurisdictions worldwide. In the wake of this crypto news, the price of BNB — Binance’s native cryptocurrency — dropped by 2.50% in the past 24 hours as compared to a drop of 0.14% recorded over the last week. At the time of writing, BNB is currently exchanging hands at $304.36
Also Read: Binance To Suspend Crypto Services For Japan By November 30
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