Pile of cryptocurrency coins
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Crypto giant Binance has promised the Ontario Securities Commission (OSC) that it will not deal with Ontario investors again until it gets the go-ahead from regulators.

The OSC published a legally binding undertaking it received from Binance (Binance Holdings Ltd. and Binance Canada Capital Markets Inc.) that aims to mollify regulators after an earlier series of conflicting messages from the firm.

In mid-2021 the company said it planned to stop operating in Ontario and that investors would have to close their positions by the end of the year.

However, on Dec. 29, 2021, it told investors, incorrectly, that it was allowed to continue dealing with them.

The OSC immediately issued a statement to the contrary, stressing that the company wasn’t registered to deal with investors in Ontario.

According to the regulator, “Binance subsequently confirmed to OSC staff and advised Ontario investors that trading restrictions were in place for Ontario accounts.”

However, “Despite the representations made to staff and investors, Ontario investors were able to continue to trade after the restrictions were supposedly in place,” the undertaking noted.

And it said the firm tweeted a user, indicating that they could continue to trade since their account was already open — which was also inaccurate.

According to the undertaking, Binance has now stopped dealing with investors in Ontario, apart from certain activities that can continue, such as allowing investors to withdraw their funds and to deposit additional margin to maintain existing positions.

Among other things, the company also adopted controls, including internet protocol identification, to prevent trading with, and new account openings by, Ontario investors. It will also require investors to close out certain positions within 90 days. And it must provide quarterly reports to the regulator.

“Binance has informed staff that it is committed to pursuing a regulatory path to ensure compliance with Ontario securities law,” the undertaking said.

The firm also pledged to hire an outside consultant by the end of March to review its controls and other compliance procedures.

Last March the OSC signalled to the crypto sector that trading platforms operating in Ontario would have to seek registration or face enforcement action.

So far, six platforms are registered, and others are in discussions with the regulator. Several companies are also facing enforcement actions after ignoring the warning.