Gemini, the cryptocurrency exchange founded by the Winklevoss brothers, announced it would cease operations in Canada after the CSA extended its deadline to comply with stablecoin regulations until the end of 2024. The move comes as several other exchanges have also left the Canadian market.
On September 30, the Gemini cryptocurrency exchange informed its Canadian users that it had decided to cease operations in the country. This is the latest in a wave of cryptocurrency exchanges withdrawing from Canada, following the Canadian Securities Administrators (CSA) tightening regulations on the industry.
Geminiâs withdrawal comes just days after the CSA issued an update to its guidance for cryptocurrency trading platforms (CTPs) on September 26 regarding stablecoins â a type of value-referenced cryptographic asset (VRCA). Accordingly, the CSA continues to extend the deadline for CTPs to comply with stablecoin regulations to December 31, 2024. Previously, the above deadline was moved from April 30, 2024 to October 31, 2024 due to technical issues during the implementation process.
Source: CSA News
The extension is intended to provide CTPs with additional time to meet the terms and conditions of their registration, pre-registration undertakings (PRUs) or propose alternative arrangements to address investor protection concerns, the CSA said.
New Stablecoin Regulations and the Wave of Exchange Exit
The CSA began restricting stablecoin trading in December 2022, holding that stablecoins could be classified as securities or derivatives. It later relaxed the rules, allowing trading of certain stablecoins if they met transparency and custody conditions.
However, tightening regulations in general, especially regarding stablecoins, are believed to be the main reason why many exchanges have decided to leave Canada. Binance, one of the world's largest cryptocurrency exchanges, has announced its withdrawal from the market in May 2023, citing CSA regulations.
Several other companies, including OKX, dYdX, Paxos, and Bybit, have also made similar decisions in 2023. Social media users speculate that the exchanges' use of stablecoins as primary trading pairs may have been one of the reasons for the decision.
While there is no official ban on Tetherâs USDT in Canada, the stablecoin is not allowed as part of a restricted dealer license. Major exchanges like Kraken and Coinbase have removed USDT from their Canadian platforms by 2023.
While many exchanges are opting to pull back, Coinbase is working to increase its presence in Canada. In April 2024, Coinbase announced plans to launch a stablecoin linked to the Canadian dollar on its platform, after receiving a limited dealer license in the country.
Currently, according to the official records of the CSA, there are at least 12 authorized cryptocurrency exchanges operating in Canada, including Bitbuy Technologies, Coinbase Canada, Coinberry, Fidelity Clearing Canada, Netcoins, Newton Crypto, Shakepay, Wealthsimple Investments. In addition, the CSA also published a list of companies that have filed PRU applications and a list of companies that are prohibited from operating in certain jurisdictions in Canada.
