Binance Faces Investigation by Canadian Securities Regulator

• Binance is reportedly being investigated by the Ontario Securities Commission.
• The investigation is to determine whether cryptocurrency exchanges are attempting to evade local regulations and compliance controls.
• The cryptocurrency exchange announced its departure from Canada two days after receiving the investigation order.
• Binance is facing a similar investigation in Brazil for allegedly helping clients circumvent a ban on derivatives trading.

Binance finds itself under regulatory scrutiny yet again, this time at the hands of Canadian securities regulators. The Ontario Securities Commission is investigating the world’s largest cryptocurrency exchange to determine whether it attempted to circumvent local regulations and compliance controls as it sought approval to operate in the country.

Binance leaves Canada two days after receiving investigation order

according to a report BloombergBinance was served with an investigative order by the Ontario Securities Commission on May 10, 2023.Just two days after the investigation began, the cryptocurrency exchange Announce It will exit the Canadian cryptocurrency market. At the time, the cryptocurrency exchange blamed Canada’s “challenging” regulatory environment and recent stablecoin guidelines and investor restrictions for its decision to exit. The exchange did not say it was being investigated by one of the country’s top securities regulators.

Binance disclosed the Ontario Securities Commission’s investigation in a recent filing with the Capital Markets Tribunal. The order of inquiry does not allege any violations of Ontario’s securities laws on the part of the cryptocurrency exchange. The subpoena issued by the securities regulator requires the exchange to produce documents related to the scope of the investigation. This includes sweeping requirements for “all communications between directors, officers, employees, contractors, agents, and advisors of the exchange and its affiliated entities with respect to Ontario (or the whole of Canada).” The subpoena was addressed to the exchange and did not name anyone.

“The Investigation Order authorizes, without limitation, an extremely broad investigation into whether Binance has taken steps to circumvent Ontario’s securities laws and compliance controls with respect to Binance.com or engage in conduct contrary to Ontario’s securities laws and/or the public interest .”

The Canadian securities regulator’s investigation comes a month after Brazil’s federal prosecutor’s office and federal police began investigating Binance for allegedly offering securities to its customers by helping them evade a cease and desist order on cryptocurrency futures.