By George Ward
Kraken, the prominent cryptocurrency exchange, is capitalizing on its decision to remain in Canada while its competitors, including Binance and OKX, have announced their intentions to withdraw their operations. Accordingly, Kraken reported a five-fold spike in app downloads, increasing customer deposits by 25%.
Kraken Grows Amid Binance And OKX Exit
Following Binance’s departure announcement in early May, Kraken witnessed a remarkable 25% surge in customer deposits within Canada. Moreover, when OKX expressed its intention to withdraw in March, Kraken observed an incredible fivefold surge in downloads of its two mobile apps exclusively for Canadian clients.
Canada implemented stricter measures for its financial market players earlier this year in a notable move to strengthen its regulatory framework for digital asset trading. Consequently, several major cryptocurrency exchanges, including Binance, the largest exchange by trading volume, and OKX, decided to leave.
Joining the exodus were crypto firms Paxos, Blockchain.com, and Deribit, all of whom announced their departures. The most recent release came from Bybit earlier this week.
Meanwhile, Coinbase (COIN), a prominent exchange listed on Nasdaq, expressed satisfaction in committing to Canada’s enhanced Pre-Registration Undertaking (PRU), mirroring Kraken’s stance. In contrast to the unclear regulatory landscape in the United States, Coinbase even expressed its admiration for working alongside a regulator that fosters meaningful engagement between the firm and the regulatory body.
Canadian Regulator Probes Binance
After deciding to exit the Canadian market due to differences in regulatory guidelines, Binance, the renowned cryptocurrency platform, finds itself the subject of an inquiry conducted by the Ontario Securities Commission (OSC), Canada’s largest securities supervisory body.
An official publication released by the Commission affirms an ongoing investigation into Binance’s operations within Canada. This revelation sheds light on the intense regulatory scrutiny that the platform is currently facing.
The OSC took this significant step on May 30 by filing legal documents to demand the submission of records and information from Binance and potentially other entities involved. Binance issued a rebuttal stating that an earlier agreement, an undertaking established in 2022 between the platform and the OSC, bars the regulator from initiating enforcement actions based on past conduct.
Between 2021 and 2022, Binance faced various challenges and disputes with the regulator regarding its operations in Canada and its ability to provide services to Canadian customers. Founded by Canadian entrepreneur Changpeng Zhao, Binance is officially registered in the Cayman Islands and conducts business through a registered office in George Town.
Furthermore, in December 2021, Binance Canada Asset Management Inc. and Binance Canada Capital Markets Inc. were established, per Canadian regulations, to serve residents of Canada pending the necessary regulatory approvals. As Binance progressed with its registration efforts under the Alberta Securities Commission (ASC), the platform received directives to adhere to recently implemented regulatory measures.
In April 2023, the ASC conveyed to Binance the decision that its stablecoin, BUSD, would not receive approval as a value-referenced asset. Additionally, the ASC disclosed that BUSD and BNB would be subject to investment restrictions in specific provinces.
Before the OSC initiated the investigation order on May 10 and the subsequent issuance of summons on May 11, Binance had already informed the ASC about its intentions to withdraw from the market.