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Amid the tightening of regulatory rules in Canada, crypto exchanges are contemplating whether to continue their operations or exit from the country.
Similar to the United States, regulators in Canada have been tightening their grip on crypto firms operating in the region. Amid this intense regulatory environment, several exchanges have planned to move out of the country. However, crypto exchange Coinbase would prefer to continue its operation in Canada. A person familiar with the matter said that Coinbase is currently holding talks with Canadian regulators. Based out of the US, Coinbase is also seeking an appropriate license to continue its operations in the country.
Coinbase and Other Exchanges in Canada
The license will help the crypto exchange to establish its business in a legitimate manner. Briefing the media house about the company’s commitment to the Canadian market, Elliott Suthers, Coinbase’s communications director, said:
“We remain as committed as ever to the Canadian market as a core component of our international road map”.
On the other hand, the sources familiar with the matter, who preferred to stay anonymous, suggested that Binance has decided to pull out of Canada amid the tightening of rules by Canada for crypto exchanges. However, the firm’s executives have been responding differently. A spokesperson to Binance recently noted that the exchange “has not made definitive plans yet”. However, one of the other executives said that Binance “is actively engaged with the [Canadian Securities Administrators] in its pursuit of registration.”
Canada Tightening Crypto Rules
Sources familiar with the matter stated that the Canadian authorities had set March 24 as the deadline for the crypto firms to tighten the rules around digital assets. Several years ago, Canada had already suffered a high-profile exchange blow-up with QuadrigaCX.
Last month in February, Canada introduced a new regulatory framework that requires the segregation of assets held in custody while tightening the rules for re-hypothecation, margin trading, and others.
Amid the tightening of crypto rules in Canada, different exchanges have been taking different stances. Earlier this month in March, crypto exchange OKEx announced its departure from Canada. Similarly, Blockchain.com has confirmed its departure along with Deribit who informed its customers about their plans of departure.
On the other hand, Crypto.com has decided to continue its operations in Canada while another exchange Kraken is likely to make an announcement very soon.
Crypto exchanges worldwide have been facing the wrath of regulators. Over the last week, the SEC issued a Wells Notice to Coinbase while the CFTC sued Binance over violations of derivatives regulations.