Oleg Galeev

11 hours ago

UPDATED (May 1, 2022): Why Is Binance Banned In Ontario?

Binance ban in Ontario, Canada

UPDATE, December 29, 2021: Binance Canada has recently sent the following email to their users:

Dear Binancian,

In June, we wrote to you due to Ontario becoming a restricted jurisdiction, and that you may need to close your Binance account. However, as a result of ongoing and positive cooperation with Canadian regulators, Binance in Canada has been successful in taking its first steps on the regulatory path by registering in Canada as a Money Services Business with FINTRAC.

This registration allows us to continue our operations in Canada and resume business in Ontario while we pursue full registration. As a result of ongoing and positive cooperation with Canadian regulators, there is no need for Ontario users to close their accounts by December 31, 2021.

As a result, Ontario users can continue using Binance. You can sign up here Hooray!

NEW UPDATE from Binance, January 6, 2022:

Dear Ontario user,

We are writing to you to confirm that your account with Binance has been restricted and you are not permitted to trade any product.

Binance users in Ontario can close, reduce, and/or redeem their positions, and can withdraw funds from their Binance accounts if they so wish. For derivatives accounts, users can top-up margin balances to prevent margin calls and liquidations.

We recognise that these restrictions may be disruptive, and we apologise for any inconvenience that this may cause to users. We also apologise to the Ontario Securities Commission and we take full responsibility by taking these restrictive steps.

Thank you for your understanding. If you have any questions please do not hesitate to contact customer service.

We reached out to Binance on that matter: “Binance accounts in Ontario remain restricted and users in Ontario will not be able to open new accounts or trade. Users can withdraw their assets at any time. We recognise that these restrictions may be disruptive in the short term, and we apologise for any inconvenience that this may cause. We will provide further updates in due course. Thank you for your patience and understanding.

Some Ontario Binance users say, they were able to reverify their account by using IDs from a different province or country. Others switched over Kucoin because it has an almost identical user experience. Keep in mind that Kucoin has failed to comply with Ontario regulations as well. However, they did not restrict Ontario users.

Current update: unfortunately, Ontario banned Binance. Instead, we would recommend using something from our rating of the best cryptocurrency exchanges for Canadians.

Ontario vs. Binance: What is happening?

Binance has ceased operations in Ontario after the Ontario Securities Commission (OSC) accused three other crypto exchanges of failure to comply with Ontario’s Securities Act. Rather than comply or have actions filed against them, Binance has decided to stop operating in Ontario altogether. The exchange has blocked services to Ontario and has urged its users to “close active positions” by December 31, 2021. 

The OSC has alleged that Bybit, Poloniex, and KuCoin have failed to comply with Ontario regulations. Bybit allows users to trades futures contracts, which the OSC says are securities and derivatives. In the statement of allegations against Bybit, the OSC says “Bybit only provides its investors with instruments or contracts involving crypto assets. These instruments or contracts constitute securities and derivatives.” The OSC alleges that Bybit failed to comply with registration requirements that apply to those who facilitate the trading of securities and derivatives. In the statement, the OSC goes on to say that any crypto exchange disrega rding securities law will face regulatory action.  

 

For Binance users being forced to close their accounts, there could be tax implications. Selling crypto for fiat and trading from one crypto to another constitutes a taxable transaction. Users may have to pay income tax or capital gains tax. For Binance users in Ontario, it’s important to export all of your trade details by the December deadline so that you can accurately complete your taxes next year. 

As a result, we recommended to Ontario Binance users move their funds to another crypto exchange for Canadians as soon as possible. It’s also good practice for anybody who purchases crypto to ensure you keep records of your transactions for tax purposes. 

It’s unclear at this point if Binance will halt operations in other provinces, or if the OSC will take action against any more exchanges. Cryptocurrency regulations are still being ironed out, so it’s important to be aware that things can change quickly, just as we’ve seen with Binance. It seems that Binance is legit for Ontario Securities Commission (OSC) now.

What Are The Alternatives?

There are so many crypto exchanges available for Canadians besides Binance. We highly recommend you check this list of Canadian cryptoexahnges and pick the crypto exchange that works best for your needs.

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