Binance Withdrawing From Canada Absolutely Sucks For Investors

It's a sad day in Canadian crypto land, as Binance's decision to withdraw completely from Canada seems final. If you are a Binance user in this country, or you're wondering about what this means for the future of crypto in Canada, then this one is for you.

Binance is one of the largest and most popular crypto exchanges in the world, offering a wide range of services and products for traders, investors, and developers.

However, on May 12, 2023, Binance announced on Twitter that it will join other prominent crypto businesses in "proactively withdrawing" from the Canadian marketplace.

The reason? Binance said that the new guidance related to stablecoins and investor limits provided to crypto exchanges by the Canadian regulators makes the market "no longer tenable" for them at this time.

Unfortunately, today we are announcing that Binance will be joining other prominent crypto businesses in proactively withdrawing from the Canadian marketplace.

We would like to thank those regulators who worked with us collaboratively to address the needs of Canadian users.…

— Binance (@binance) May 12, 2023

Canada has tightened regulations for crypto asset trading platforms in recent months, with the introduction of a pre-registration process.

Companies that do not adhere to the rules will face potential enforcement action, according to the website of the Ontario Securities Commission.

Binance said it does not agree with the latest guidance and hopes to engage with the Canadian regulators to create a comprehensive framework for crypto operations in the country.

What You Need To Do

So, what does this mean for you if you are a Binance user in Canada? You have until June 30, 2023, to withdraw your funds from Binance to your bank account or to another platform.

To do so, you need to go to your fiat and spot wallet on Binance, click on withdraw, and select the currency, payment method, and withdrawal information.

Then, add a card, complete the security verification, and wait for the withdrawal to complete.

Binance will also apply an amount equal to the withdrawal fee into your account as a rebate, excluding the blockchain fees.

This is a major setback for the Canadian crypto community, as Binance was one of the most popular and trusted platforms in the country.

However, there are still other options available for Canadians who want to trade or invest in crypto assets. Some of these include:

• Kraken: A US-based exchange that supports CAD deposits and withdrawals via wire transfer or Interac e-Transfer. Kraken offers a variety of trading pairs, margin trading, futures trading, and staking services.
• Coinbase: A US-based exchange that supports CAD deposits and withdrawals via debit card or PayPal. Coinbase offers a user-friendly interface, a wide range of cryptocurrencies, and an advanced trading platform called Coinbase Pro.
• Bitbuy: A Canadian exchange that supports CAD deposits and withdrawals via Interac e-Transfer, wire transfer, or Flexepin. Bitbuy offers competitive fees, fast transactions, and high-security standards.

These are just some of the alternatives that you can consider if you are looking for a new crypto platform after Binance's withdrawal from Canada.

Of course, you should always do your own research and due diligence before choosing any platform or service.

Decentralized Exchanges

As more crypto companies leave North America, I wouldn't be surprised if more investor turn to decentralized exchanges (DEXs).

A DEX is a platform that allows users to trade cryptocurrencies directly with each other, without relying on a third-party intermediary.

Unlike Centralized Exchanges (CEXs), which store users’ funds and personal information on their servers, DEXs use smart contracts on blockchain networks to facilitate transactions.

Smart contracts are self-executing agreements that follow predefined rules and conditions. This means that users have full control over their funds and data, and can trade with anyone, anywhere, anytime.

Are DEXs Better Than CEXs? The Pros And Cons

There are many benefits of using DEXs over CEXs, here are some of the main ones:

• Security: DEXs eliminate the know-your-customer policy that plagues CEXs. Since users don’t have to deposit their funds or share their personal information with a third party, they are less vulnerable to identity theft and intrusive background checks. Moreover, DEXs are more resilient to censorship and shutdowns, as they operate on decentralized networks that are not controlled by any single entity.
• Privacy: DEXs preserve users’ privacy and anonymity, as they don’t require KYC/AML or ID verification processes as I just stated. Users can trade without revealing their identity or location, and without being tracked or monitored by anyone. This is especially important for users who live in countries with strict regulations or sanctions on crypto activities like Canada and the U.S
• Freedom: DEXs offer users more freedom and choice, as they can trade any token they want, without any restrictions or limitations. Users can access a wider range of cryptocurrencies, including new and innovative ones that may not be listed on CEXs. Users can also set their own prices and terms for their trades, and negotiate directly with other users.
• Innovation: DEXs foster innovation and experimentation in the crypto space, as they enable users to create and participate in new and exciting projects. Users can launch their own tokens, create liquidity pools, provide lending and borrowing services, join DAOs (decentralized autonomous organizations), and more. DEXs also support cross-chain interoperability, which allows users to exchange tokens across different blockchains.

How will DEXs become more popular?

DEXs have been growing rapidly in the past few years, especially with the rise of DeFi (decentralized finance) applications that leverage DEX technology. According to DeFi Pulse, the total value locked in DeFi protocols has reached over $100 billion as of May 2023, with most of it coming from DEX platforms such as Uniswap, SushiSwap, Curve, and Balancer.

However, DEXs still face some challenges and limitations that prevent them from reaching mass adoption. Some of these include:

• Usability: DEXs can be complex and confusing for beginners, as they require users to have some technical knowledge and skills. Users need to understand how to use wallets, smart contracts, blockchain networks, gas fees, etc. Users also need to be careful and responsible for their own transactions, as there is no customer support or dispute resolution mechanism on DEXs.
• Scalability: DEXs can suffer from low speed and high costs due to network congestion and limited capacity. Since most DEXs run on Ethereum, which is currently the most popular blockchain for smart contracts, they inherit its scalability issues. Ethereum can only process about 15 transactions per second, which is far from enough to meet the growing demand for crypto trading. As a result, users have to pay high gas fees and wait for long confirmation times when the network is congested for their trades.
• Liquidity: DEXs can struggle with low liquidity and high slippage due to the lack of market makers and order books. Liquidity refers to the availability of buyers and sellers in a market, while slippage refers to the difference between the expected price and the executed price of a trade. On DEXs, users rely on liquidity pools, which are pools of tokens that are locked by users who provide liquidity in exchange for fees or rewards. However, liquidity pools can be insufficient or imbalanced, leading to low trading volumes and high price fluctuations.

The Bright Side

Fortunately, there are many solutions and innovations that are being developed to overcome these challenges and improve the performance and user experience of DEXs. Some of these include:

• Layer 2 solutions: Layer 2 solutions are protocols that run on top of existing blockchains (Layer 1) to increase their scalability and efficiency. Layer 2 solutions use various techniques, such as sidechains, state channels, rollups, and plasma, to process transactions off-chain and only submit the final results to the main chain. This reduces the network congestion and lowers the gas fees for users. Some examples of DEXs that use Layer 2 solutions are Loopring, zkSwap, and QuickSwap.
• Cross-chain bridges: Cross-chain bridges are protocols that enable the transfer of tokens and data across different blockchains. Cross-chain bridges allow users to access a wider range of cryptocurrencies and services that are not available on a single blockchain. They also enhance the interoperability and compatibility of different DEX platforms and DeFi applications. Some examples of cross-chain bridges are Ren, ThorChain, and Chainlink.
• Automated market makers (AMMs): AMMs are algorithms that determine the prices and execute the trades on DEXs, without relying on order books or market makers. AMMs use mathematical formulas, such as constant product or constant mean, to calculate the prices based on the ratio of tokens in the liquidity pools. AMMs provide users with instant and frictionless trading, as well as incentives for liquidity provision. Some examples of AMMs are Uniswap, Balancer, and Bancor.

Conclusion

In conclusion, DEXs are a revolutionary innovation that offers users a more secure, private, free, and innovative way to trade cryptocurrencies. DEXs have many advantages over CEXs, but they also face some challenges and limitations that need to be addressed.

However, with the rapid development of new technologies and solutions, such as Layer 2, cross-chain bridges, and AMMs, DEXs are becoming more user-friendly, scalable, and liquid.

I believe that DEXs will potentially become more popular in the future, as they represent the true spirit and vision of crypto: decentralization, democratization, and disintermediation.