Binance is the latest crypto exchange for shuttering operations in Ontario

[ad_1]

Will the other provinces follow Ontario’s example?

With the exception of British Columbia and Quebec, the other eight provinces in Canada generally follow the lead of the Ontario Safety Commission. Canada does not have a federal agency to regulate securities, so each province must come up with the legislation that best suits them.

This is different from the SEC in the United States, which is a federal agency and has national authority. Personally, I live in Nova Scotia, one of the smaller Canadian provinces located on a peninsula on the east coast. A major question I have for the Nova Scotia Securities Commission is whether or not they will follow Ontario in ending the use of stock exchanges in the province.

If I were to speculate on the matter, I have a feeling they will. Nova Scotia rarely demonstrates political or regulatory autonomy, and many other Canadian provinces do the same.

Create a welcoming environment

Regulatory repression ultimately creates an inconsistent environment for many people or businesses wishing to start a project. The regulations increase the barrier to entry to even put your product or cryptocurrency on the market. The average individual or startup now needs the support of a legal team or institutional investors in order to get through the plethora of legal documents needed to meet regulatory requirements. At the same time, regulation is also supposed to protect investors, and I admit that this is a much needed addition to the cryptocurrency space. There are many scam schemes that fall under the category of stack or ponzi schemes. So where is the balance ?

The middle ground is somewhere between making reasonable regulations, subsidizing the cost of working with lawyers, and speeding up the application and review process. When my company Atlantic Blockchain was conceptualizing a real estate tokenization project, we visited the Nova Scotia Securities Commission. We found that the process of applying and working with the regulator would be a multi-year process with many visits to our lawyer. In the end, there would be no guarantee that our application would be successful, and we would be able to undertake the project we had in mind.

The cost outweighs the benefit

Rather than fight or comply with the regulations, Binance has decided to withdraw from the region altogether. What regulators may or may not realize is that complying with the regulations comes at a huge cost to Binance. Binance engineers should change their platform and user experience to limit the site’s default functionality. There may be entirely new data collection requirements, along with obligations to protect it. All of these extra costs, at a time when Binance is experiencing massive growth in other parts of the world.

Ontario is home to 15 million people, approximately 500,000 of whom own cryptocurrency. Some subsets of this population likely use Binance. Needless to say, there is little justification for spending resources on regulatory compliance for such a small population.

Binance on receipt of end of regulatory crackdown

Ontario isn’t the only place that has served Binance with a ceasefire notice.

More recently, the UK and Japan have also taken a closer look at Binances’ operations. The crux of these crackdowns comes from a claim that Binance is not complying with AML requirements by listing projects with sketchy fundamentals. If this is truly the case, then virtually all cryptocurrency exchanges have to go out of business, as sketchy projects cost a dime a dozen.

Binance, a highly respected exchange

It should be mentioned that Binance is one of the most respected and diligent cryptocurrency exchanges in the world. They have done a lot to provide their user base with a safe and secure user experience. Binance Academy is an example of providing users with a reliable educational resource for trading and acquiring cryptocurrencies. In addition, before playing with advanced financial instruments such as margins and derivatives, you should pass a test indicating that you are aware of the risks you are taking.

It worries me that an exchange as reputable as Binance is subject to regulatory crackdown. If Binance is likely to be cracked down on its merits, and the work it has done to reduce user exposure to risk, then what is stopping regulators from cracking down on the rest of the industry? ? As far as I know, Binance is not the easy target, which only means that there are plenty of other exchanges that could be next on the chopping block.

What to do if your trade is closed

There are really only a couple of things you can do if you end up with an account on Binance or one of the other exchanges that are being closed. Move your funds. It can be difficult to find an exchange that complies with all applicable regulations, so be prepared to make some moves if the crackdown escalates.

Right now, this crackdown may start to feel like a hot potato game, as users move their funds from one platform to another. At the same time, all these regulatory actions take place on centralized exchanges, they reinforce the value proposition for the DeFi movement. In theory, DeFi makes anything that regulators decide to do obsolete.

[ad_2]