What Is Binance – And Can You Use It In Canada?

Binance is a cryptocurrency platform originally developed by a Chinese developer named Changpeng Zhao. Although it became popular in Canada, in 2023, the company announced that Binance would be exiting the Canadian marketplace due to stricter regulations around stablecoins and investor limits.

The Binance exit follows the Canadian Securities Administrators (CSA) notice for unregistered platforms to agree to undertake pre-registration and comply with several commitments. We’ll cover the legality, controversy, and availability of this large crypto platform.

What is Binance?

Binance is a crypto-to-crypto trading platform created by Changpeng Zhao in 2017. It supports trading between over 400 different cryptocurrencies, including Bitcoin, Ethereum, Doge, Binance’s own BNB, and more.

Binance users enjoy how easily it allows them to trade between cryptocurrencies. You can convert a supported currency into BNB (Binance's in-house cryptocurrency) and then into the cryptocurrency of your choice.

Binance also offers some of the lowest exchange rates in the market, and unique tools and services like:

• Binance Earn: A platform for staking or earning interest by depositing stable coins with the exchange.
• Binance Visa Card: A credit card that allows users to convert their cryptocurrencies into fiat currency and spend it on products and services.
• NFT trading: A service that allows you to browse, bid on, and sell NFTs.

Is Binance legal in Canada?

Binance is no longer available in Canada. The company took to Twitter on May 12, 2023 to announce their proactive departure from Canada. They cited that the Canadian marketplace was no longer tenable for them after the CSA released guidelines surrounding new regulatory procedures for non-registered crypto trading platforms.

Some of the main points in the CSA’s crypto guidelines include:

• Non-registered crypto exchanges must engage in a pre-registration undertaking, referred to as a PRU.
• During this process, these exchanges are expected to make commitments in line with greater investor protections.
• These commitments include enhanced segregation around client securities (such as keeping it separate from the platform’s property), limits on exchanges offering leverage or credit to clients, and consent of the CSA prior to clients selling or buying stablecoin.

To read the full notice and all of the commitments, see: CSA Staff Notice 21-332 Crypto Asset Trading Platforms.

According to Binance, this decision to leave Canada had been in the works for some time in an attempt to find a way to work within the new regulatory framework. These changes came after several insolvencies in the crypto market.

While Binance is still available in many other countries as a cryptocurrency trading platform, almost 20 countries have banned it because the company lacks transparency and investor protection.

Why is Binance controversial?

Trading in crypto assets is risky. Price volatility is high, scams are common, and governments around the world have been slow to enact laws and regulations to protect users.

In addition, Binance has been proven difficult in complying with local money laundering laws and has failed to register for business in many countries. The company has also publicly stated that it disagrees with government attempts to regulate crypto exchanges.

This has led Binance to be restricted or outright banned in 19 countries, including Canada, the U.S., the U.K., Japan, Italy, France, Germany, Malaysia, and India.

How to use Binance

If you plan to use Binance in a country where it is allowed (or you choose to use a VPN), you’ll need to:

• Download the app or visit their website
• Provide proof of your identity via a scan of photo of your ID
• Use a credit card to add funds to your account

Although Binance is fairly easy to use, the user interface is not as easy to understand as that of some of its competitors, such as Coinbase. They also have their own digital wallet, allowing you to store your cryptocurrency.

After you’ve signed up and funded your account, you can start trading on Binance.

Is Binance safe to use?

Because cryptocurrencies are supported by blockchain, Binance can be considered safe to use. That said, the company has been investigated for money laundering and disregarded government regulations in the U.S. and Malta.

Although Binance touts 2-factor authentication, cold (offline) storage, and FDIC insurance for USD balances, the fact that it's unregulated in Canada makes Binance a huge security risk.

Phishing, scams, and fraud are a concern when dealing with any cryptocurrency company, but Binance’s lack of regulations means you may be more likely to be defrauded – and it could be difficult to get your money back.

FAQ

Can I still use Binance in Canada?

Binance is no longer available in Canada, and you won’t be able to access it unless you’re abroad in a country that hasn’t banned Binance or you’re using a VPN.

Why did Binance shut down in Canada?

Binance stated that it did not want to follow pre-registration rules or adhere to regulations set by the Canadian Securities Administrators (CSA), so it withdrew from the Canadian market in May 2023.

What is the best crypto platform in Canada?

According to moneyGenius’s research, the best crypto platform is Coinsquare. It’s easy for beginners to use, has reasonable fees, and offers high-net-worth options. Plus, it’s a Canadian platform.