Crypto exchange Gemini has announced its exit from the Canadian market, joining several other platforms that have left due to the country’s strict regulatory environment.

Canadian customers of the Winklevoss-founded exchange reported receiving an email urging them to withdraw their funds by Dec. 31, giving them 90 days to move their assets.

Well @Gemini is officially closing all customer accounts in Canada. It won’t affect me as I am huge fan of @ndaxio but I am curious to what “limited exceptions” means. #crypto #cryptocanada #canada pic.twitter.com/vFvmw1iMyR

— Trafford 🇨🇦 (@trafford66) September 30, 2024

According to the Sept. 30 notice, all Canadian accounts will be closed by the given deadline “with limited exceptions.” Users have been asked to withdraw their crypto and fiat balances.

The move comes as a surprise, considering that the exchange previously described Canada as an “essential market” for its international expansion. Gemini’s decision to exit Canada mirrors that of other major platforms like Binance, OKX, dYdX, and Bybit, all of which have struggled to navigate the regulatory environment. 

These exchanges have cited the complexity and cost of compliance with Canadian regulations as primary factors in their decision to leave the market. 

Currently, some global platforms, such as Coinbase, Crypto.com, and Kraken, are among those still operating within Canadian borders.

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Restrictive regulations

Notably, the regulatory environment began tightening in February 2023 when the Canadian Securities Administrators required all crypto exchanges operating in the country to sign legally binding pre-registration undertakings. This came on top of existing restrictions, including the prohibition on offering margin trading to Canadian users.

The regulations were aimed at bolstering investor protections and bringing more transparency to the crypto sector but also imposed strict limitations on certain activities within the crypto market. 

Since the CSA considers some stablecoins to be securities or derivatives, exchanges were prohibited from offering stablecoins or value-referenced crypto assets through contracts without prior approval. This regulation was one of the most challenging for platforms to comply with.

Some exchanges, such as Bybit and KuCoin, were also hit with fines from the Ontario Securities Commission for operating without proper registration.

Although Gemini initially complied with these regulations by submitting its pre-registration in April 2023, it ultimately decided to cease operations in Canada.

With exchanges like Gemini bowing out, Canadian users have fewer ways to access the decentralized market as crypto regulations get tighter by the day.

On April 17, 2024, the Canadian government introduced a new Crypto-Asset Reporting Framework, set to be enforced in 2026, which will require all cryptocurrency service providers, including exchanges, brokers, and ATM operators, to report detailed transaction data annually.

Further, the framework requires service providers to disclose client-specific information, such as names, residential addresses, and taxpayer identification numbers.

Read more: Crypto market will continue to expand over the next two years, according to Gemini