Canada's Recent Regulatory Development Sees Exit Of Another Major Crypto Exchange Platform

The Dubai-based crypto exchange revealed its exit from Canada on Tuesday, informing the public that it would stop opening new accounts for users beginning Wednesday.

In a post titled "Notice on Exit from Canadian Market," ByBit said it has always been its "primary objective to operate our business in compliance with all relevant rules and regulations in Canada." However, considering the "recent regulatory development" in the country, the company has "made the difficult but necessary decision to pause the availability of our products and services."

As a result, ByBit will no longer be "accepting account opening applications by any identified Canadian residents and existing Canadian nationals" and existing Canadian customers who are not able "to make any new deposits or enter into new contracts or increase any of their existing positions for all products and services" by July 31. However, the company clarified that they could still withdraw or reduce their positions.

ByBit, which recently opened its Dubai global headquarters, is the latest crypto exchange platform to shut down its operation in Canada due to its challenging regulatory environment.

The country released new guidance for crypto businesses in February that requires crypto exchange and trading platforms to acquire approval from the country's financial watchdog, Canadian Securities Administrators. The regulator will subject applicants to a wide range of due diligence checks before giving them the approval.

Canada's fresh set of rules also introduced a pre-registration process to crypto exchange platforms as well as the classification of stablecoins as security.

Moreover, the country now restricts businesses "from permitting Canadian clients to enter into crypto contracts to buy and sell any crypto asset that is itself a security and/or a derivative."

Binance, the world's largest centralized crypto exchange platform by trading volume, announced earlier this month that it was leaving Canada, as it felt the market condition there was "no longer tenable."

"Albeit a small market, it held sentimental value for us as the home country of our founder," the exchange said, citing that "new guidance related to stablecoins and investor limits provided to crypto exchanges makes the Canada market no longer tenable for Binance at this time."

In April, decentralized crypto exchange (DEX) dydX and stablecoin issuer Paxos also ended their operations in the country.

Meanwhile, Kraken and Coinbase, both major global crypto exchange platforms, have chosen to remain in the country. Coinbase even praised it for setting a clear set of crypto rules, something it reportedly demands from the U.S. Securities and Exchange Commission.