Originally published on: October 01, 2024
Gemini, the renowned cryptocurrency exchange founded by Cameron and Tyler Winklevoss, recently shocked its Canadian users by announcing it would be ceasing operations in the country. This unexpected move has raised eyebrows and led many to ponder the motives behind Gemini’s exit. Meanwhile, Canadian authorities have been ramping up regulations on the crypto industry, causing a ripple effect that has prompted several exchanges to retreat from the market.
What exactly are Canada’s latest cryptocurrency regulations, and why have some exchanges opted to vacate the scene? Join us as we delve into the pivotal factors driving these recent developments.
Gemini’s departure coincided closely with the Canadian Securities Administrators’ (CSA) release of an update on Sept. 26 regarding stablecoins, which are now referred to as value-referenced crypto assets (VRCA). The CSA initially required compliance from exchanges by April 30, 2024, but technical challenges led to an extension of the deadline to Oct. 31. Subsequently, another extension was granted until Dec. 31, 2024, allowing more time for exchanges to align with regulatory standards or propose suitable alternatives.
The aim of these extensions is to grant crypto trading platforms (CTPs) ample time to ensure compliance with registration requirements or pre-registration undertakings (PRUs), all while addressing investor protection concerns. Despite numerous reaching out to CSA for a list of approved VRCA, no response was received at the time of publication.
The CSA has cautiously monitored the trading of stablecoins since December 2022, potentially categorizing them as securities or derivatives. However, they outlined conditions under which certain stablecoins are permitted, including transparency and custody by qualified custodians.
With around 12 authorized crypto exchanges operating in Canada, some notable names include Coinbase Canada, Coinberry, Newton Crypto, and Shakepay, among others. While Gemini bid farewell, others like Coinbase have been actively enhancing their presence in the country. In fact, Coinbase obtained a restricted dealer license in April 2024, marking its official entry into the Canadian market.
Binance’s official exit from Canada in May 2023 further underscored the challenges faced by exchanges following the imposition of stringent regulations. Additional departures from companies like OKX, dYdX, and Paxos, coupled with delistings of stablecoins like USDt by major exchanges, have hinted at the complexities within the Canadian regulatory landscape.
Could these departures be tied to the usage of stablecoins such as USDt and Binance USD, or are there deeper regulatory issues at play? While USDt use is not officially banned in Canada, its restrictions highlight the evolving and volatile nature of the cryptocurrency market in the country.
As the saga of cryptocurrency regulation continues to unfold, the exit of key exchanges like Gemini raises crucial questions about the future of crypto in Canada. Stay tuned as we navigate this evolving landscape together and discover what lies ahead for the crypto industry in the Great White North.
