Oleg Galeev

2 weeks ago

Is Binance Still Legal in Canada?

Binance ban in Ontario, Canada

In 2021, the Ontario Securities Commission (OSC) accused several crypto exchanges of not being compliant with securities regulations in the province. These exchanges included Binance, Poloniex, and KuCoin. While the other two exchanges ignored the OSC’s request to halt operations or comply with regulations, Binance decided to cease operations in Ontario.

So far, nothing has changed since. If you reside in Ontario, you cannot use Binance. However, there are currently no restrictions in all other Canadian provinces and territories. 

For Ontario residents, here are some alternative crypto exchanges that you can use:

Coinsmart

Cool usability and design of Coinsmart cryptoexchange

Coinsmart is a publicly-traded crypto exchange that offers low fees and some of the most popular cryptocurrencies including Bitcoin, Ethereum, Litecoin Uniswap, Chainlink, Polkadot, Dogecoin, Shiba Inu, Bitcoin Cash, EOS, Stellar, USDC, Cardano, Avalanche, Solana, and Polygon. I personally have been using them for many years due to very low trading fees and free deposits of over $2000. They are fully compliant in Canada and that’s why it’s the most trusted exchange by Canadians.

  • Trading fees: 0.2%
  • Deposit fees: 1% for the amount under $2000. Free deposits over $2000
  • Deposit methods: Interac e-Transfer, bank wire, credit and debit cards, crypto

You can sign up here and claim free $20 in bitcoin.

Bitbuy

Making a deposit on Bitbuy's app

Bitbuy is one of Canada’s most reputable exchanges offering 25 cryptocurrencies including Bitcoin, Ethereum, Fantom, Aave, Solana and more. Bitbuy is suitable for both beginners and experienced traders looking for advanced trading tools. The deposit fees are quite high though.

  • Trading fees: 0.1%/0.2%
  • Deposit fees: 1.5%
  • Deposit methods: Interac e-Transfer, bank wire, crypto

You can sign up here and claim free $25.

Wealthsimple Crypto

Reviewing Wealthsimple desktop app

Wealthsimple is one of Canada’s top trading brokerages offering stocks, bitcoin ETFs, and crypto. Perfect for anyone looking to keep their investments in one place, Wealthsimple is the first regulated crypto trading platform in Canada. With Wealthsimple you can get instant deposits so you don’t have to wait to trade but the trading fees are quite high.

  • Trading fees: 1% to 2%
  • Deposit methods: Electronic funds transfer, crypto

You can sign up here and claim free $50.

Newton

Advanced charts on Newton cryptocurrency platform

Newton is fast becoming one of Canada’s top crypto exchanges for beginners. It is simple to use and has no fees for deposits or withdrawals. Newton offers more than 60 cryptocurrencies including Bitcoin, Ethereum, Loopring, Axie, Chromia, Fantom, and more. Keep in mind that spread fees are quite high. 

  • Trading fees: Up to 0.7%
  • Spread: 0.5 – 0.7%
  • Deposit methods: Interac e-Transfer, bank wire, crypto

You can sign up here and claim free $25.

Crypto.com 

Crypto.com is a top global exchange but it’s also convenient for Canadians. It offers hundreds of cryptocurrencies including Bitcoin, Ethereum, Enjin Coin, Cardano, Polkadot, Avalanche, and many more altcoins. There is also staking available and crypto Visa cards to earn crypto on your spending. 

  • Trading fees: Up to 0.4%
  • Deposit methods: Interac e-Transfer, bank wire, crypto

Canada, 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 disregarding 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 recommend 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.

Email history from Binance:

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.

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.

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

Is Binance Safe for Canadians?

Binance is safe for Canadians to use. Two-factor authentication is enabled on accounts, but you can take additional steps to secure your account. Consider:

  • Anti-virus software for your computer
  • Using a VPN when not using a secure wifi connection
  • Using an incognito window or a separate browser (without extensions or plugins) for crypto activities
  • Avoid clicking unknown links
  • Transferring your crypto to a secure private wallet

What Are The Alternatives?

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

We are building the Canadian cryptocurrency Reddit community. We appreciate it if you support us and join our Reddit community here.

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Author

Oleg is a crypto expert who has been trading since 2016. He started out with Coinbase, Kraken and Peer-to-Peer exchanges. After some time, centralized exchanges started charging crazy fees to their users.

He decided to review different crypto exchanges in order to educate Canadians on what kinds of things are going inside each one while giving them unbiased advice. On top of that, Oleg also has experience with NFT, airdrops, and crypto staking and he is constantly checking on new crypto assets.

His writing has been featured in popular Canadian media sources such as Toronto Sun.