03/01/22

CANADA: Binance is Unauthorised, Says Regulator.

As published on pymnts.com, Monday 3 January, 2022.

Ontario’s securities regulator alleges Binance has reneged on an agreement to comply with rules and is not authorized to offer trading in the province.

The Ontario Securities Commission (OSC) notified investors last week that Binance, the Cayman Islands-based company which calls itself the world’s largest cryptocurrency exchange, told its staff that no new transactions involving Ontario residents would occur after Dec. 31, 2021.

But Binance has since issued a notice to users, without any notification to the OSC, voiding this promise.

“This is unacceptable,” the OSC said in statement.

“No entity in the Binance group of companies holds any form of securities registration in Ontario.”

As a result, the regulator said unregistered platforms operating in the province may be subject to action, including temporary orders, to ensure compliance which could affect their ongoing local business operations.

So far, six crypto asset trading platforms are registered in Ontario and the regulator said it continues to work with firms that initiated compliance discussions.

Crypto asset platforms that have or will be applying for registration with securities regulators should be aware that misrepresenting their registration status raises concerns about the fitness of the firm and its principals for registration, OSC said.

In response to the charge by the OSC, a Binance spokeswoman said the company’s notice to investors was a misunderstanding. It intended to say that Binance will pursue registration in Canada and that Ontario users would not be required to close their accounts on Dec. 31, 2021.

“We acknowledge and understand that this message may not have been as clear as intended and immediately sought to remedy this miscommunication,” the spokeswoman said in an email.

PYMNTS has reported the United Kingdom Financial Conduct Authority issued a consumer warning against Binance, saying the company wasn’t allowed to operate there and the FCA couldn’t work with the company because of the unanswered questions.

Last month, the Telegraph reported that Binance CEO Changpeng Zhao has said the company plans to renew its application for an FCA license, having hired compliance officers and former employees of the watchdog.