Binance plans to return to Ontario by 2024 at the latest: Canada CEO

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Binance, the world’s largest cryptocurrency trading platform by volume, hopes to gain Canadian regulatory approval and welcome Ontario users back by 2024 at the latest, according to the company’s new managing director for the country. , Lawrence Truong.

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When that happens, Canadian users will be migrated to a separate, more limited platform, Truong said in an interview with the Financial Post this week. Such an arrangement would be comparable to the one under which Binance operates in the United States, where it has also come under intense scrutiny from regulators.

In his first media interview since being tapped to lead newly-created Binance Canada, Truong shed some light on the company’s plans here after a turbulent year that saw it retire from nation’s most populous province amid regulatory issues.

Truong, who has a background in compliance, had previously been brought in to turn around Toronto stock exchange Coinsquare after its management resigned and paid fines as part of a settlement with the Ontario Securities Commission.

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“I usually tell this as my story of the value of compliance,” Truong said. “A lot of people think compliance is a cost center, when I think there’s real business value.”

Although Binance’s founder, Changpeng Zhao, is Canadian, the company has never had much of a business presence there. Amid an OSC crackdown on unregistered exchanges, Binance banned Ontario users from accessing the site in 2021 and later incorporated a national division in Calgary with Truong at the helm.

Truong said Binance is seeking full registration as an securities and derivatives broker with the Investment Industry Regulatory Organization of Canada – skipping temporary registration as a restricted broker with a provincial regulator, a path taken by other stock exchanges.

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Becoming an IIROC broker right away, while more expensive, allows a platform to offer more features, including leverage or margin trading. Truong said if Binance ends up offering these features to Canadians, it will likely be a limited version of what its global customers will be able to access. Binance’s eventual Canadian platform would also have a smaller selection of coins, Truong said.

While a conservative estimate for the date of completion of registration with IIROC would be the spring of 2024, Truong said he hopes it will be much sooner.

“My understanding of IIROC’s processes is that a very mature equity-type business could be created in as little as six months,” he said.

Alberta is one of five provinces where firms register as investment dealers directly with IIROC and not with the local securities regulator. Binance’s choice of province has nothing to do with the regulatory regime, however, Truong said.

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“There really isn’t any regulatory arbitrage across Canada because most of the rules are harmonized,” Truong said. “It’s really a matter of jurisdiction – where business will be more friendly, like the government offering, you know, help setting up your business. Taxes are lower in Alberta for another reason.

This year, Alberta made a big push to attract crypto companies.

Truong’s own background in senior positions in the province, including enforcement with the Alberta Securities Commission, also played a role in the decision to join. to register.

“The province that I think I’m going to be most successful in because of my network and in terms of hiring people was going to be Alberta,” Truong told the company.

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Binance has about 10 people who report directly to Truong and the management team and about 15 other staff members.

“We’re committed to doubling, tripling that size as we get closer to going live,” Truong said.

The firm’s abrupt departure from Ontario came as the OSC sought to enforce new guidelines prompted in part by the $260 million implosion of the QuadrigaCX platform and as regulators around the world increased their surveillance of cryptocurrency markets.

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Binance also had a run-in with the OSC in late 2021 when the regulator accused it of trying to serve Ontario again. The company signed an undertaking in March with the OSC to stay away until it is registered.

“Because there were no boots in the field…the transition to ownership of the business in Canada was very short and not very smooth,” Truong said. “There was a bit of misunderstanding about the state of things.

“And then that translated into poor communication or poor quality of communication with the CSO. And I think the company – they didn’t really get good advice, initially in early 2021.”

Although registration is still a long way off, Binance Canada is already making its presence known.

Truong spoke at the University of Toronto’s Future of Money event in May. And at the next Calgary Stampede, Binance will join the ranks of companies offering free breakfasts.

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