As a seasoned crypto investor with roots deeply entrenched in the digital asset landscape, I find myself standing at a crossroads with the recent announcement by Gemini to exit the Canadian market. While this decision won’t impact me personally, given my loyalty to NDAX.io, it’s hard not to feel a twinge of curiosity about what “limited exceptions” entails.
The cryptocurrency platform Gemini has declared they are leaving the Canadian market, following a number of other exchanges who’ve chosen to depart due to Canada’s stringent regulatory conditions.
Customers of the Winklevoss-launched platform based in Canada were advised via email to transfer their funds out by December 31st. This timeline gives them a span of approximately 90 days to relocate their assets.
The cryptocurrency platform represented by the handle @Gemini has announced it will be shutting down all customer accounts in Canada. Since I’m a big fan of @ndaxio, this change won’t affect me directly, but I’m intrigued to understand what “limited exceptions” refers to within the context of this announcement. #crypto #cryptocanada #canada
— Trafford 🇨🇦 (@trafford66) September 30, 2024
Based on the announcement dated September 30th, it’s stated that the majority of Canadian accounts will be shut down before the specified date, with only a few exceptions. The users are being advised to withdraw both their cryptocurrency and fiat (traditional currency) balances from these accounts as soon as possible.
The unexpected action by Gemini is noteworthy given their earlier characterization of Canada as a crucial market for their international growth. Gemini’s choice to leave Canada follows a similar trend seen in other significant platforms such as Binance, OKX, dYdX, and Bybit, all of which have faced challenges adapting to the regulatory landscape.
These businesses pointed out the intricacy and expense of adhering to Canadian regulations as main reasons for choosing to exit the market.
At the moment, several international platforms including Coinbase, Crypto.com, and Kraken, continue their operations within the boundaries of Canada.
Restrictive regulations
Starting in February 2023, the regulatory landscape started becoming stricter. The Canadian Securities Administrators mandated that all crypto exchanges within the country must agree to legally binding pre-registration commitments. This new rule was added to existing restrictions, one of which is a ban on providing margin trading to users in Canada.
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.
Because the Commodity Futures Trading Commission (CFTC) classifies certain stablecoins as securities or derivative instruments, trading platforms have been restricted from providing these digital assets, including value-linked cryptocurrencies, through contracts without first obtaining approval. This regulation has proven to be particularly difficult for platforms to adhere to.
Certain trading platforms like Bybit and KuCoin faced penalties by the Ontario Securities Commission due to their failure to comply with necessary registration requirements.
Despite submitting its pre-registration in April 2023, in line with Canadian regulations, Gemini eventually chose to halt its operations within the country.
As prominent platforms such as Gemini withdraw, Canadian users find they have limited options for engaging with the decentralized market, given that cryptocurrency regulations are steadily becoming more stringent.
On April 17th, 2024, the Canadian government announced a new system for reporting crypto-assets, scheduled to begin in 2026. This system will oblige all entities offering cryptocurrency services, such as exchanges, brokers, and ATM operators, to submit comprehensive transaction details on an annual basis.
Additionally, this structure mandates that service providers share personal details about their clients, which may include their names, home addresses, and social security or taxpayer ID numbers.
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2024-10-01 10:42