Binance, the world’s largest cryptocurrency exchange, announced on May 12 that it would be suspending its Canadian operations. The move comes as a surprise to many, as Binance had only recently launched its Canadian exchange in September 2021.
There are a few possible reasons for Binance’s exit from Canada. One possibility is that the exchange is facing regulatory pressure from the Canadian government. In recent months, the Canadian government has been cracking down on cryptocurrency exchanges, and Binance may have decided that it is not worth the risk of operating in Canada.
Another possibility is that Binance is simply not profitable in Canada. The Canadian market is relatively small, and Binance may have found that it is not able to generate enough revenue to offset its costs. The Trudeau government have been critical of Cryptocurrency and have hindered its growth amongst Canadians.
Whatever the reason for Binance’s exit from Canada, it is a sign that the cryptocurrency industry is facing increasing regulatory scrutiny. This could have a negative impact on the Australian market, as Australian regulators are also considering cracking down on cryptocurrency exchanges.
According to a tweet from Binance their Canadian market was ‘quite small’ for them whereas their adoption in Australian is much larger. Therefore based on communications from Binance this holds limited impact for the Australian Market. If Australian regulators do decide to crack down on cryptocurrency exchanges, it could lead to a number of problems for the Australian market. First, it could make it more difficult for Australians to access cryptocurrency exchanges. Second, it could drive cryptocurrency trading underground, making it more difficult for regulators to track and monitor. Third, it could lead to a decrease in innovation in the Australian cryptocurrency industry.
It is though important to understand how the Australian Cryptocurrency Exchange industry works from a ‘brokerage’ perspective. The vast amount of the larger Australian based exchanges use Binance for liquidity and potentially storage. So any interruptions or removal of a major exchange like Binance would be detrimental to the Australian consumer market.
Binance’s exit from Canada is a sign that the cryptocurrency industry is facing increasing regulatory scrutiny. This could have a negative impact on the Australian market, as Australian regulators are also considering cracking down on cryptocurrency exchanges. If Australian regulators do decide to crack down on cryptocurrency exchanges, it could lead to a number of problems for the Australian market.
