By
Tolu Ajiboye
April 24th, 2024
In December, the Canadian Securities Administrators (CSA) announced strengthening its approach to oversight of crypto trading platforms by expanding existing requirements for platforms operating in Canada.
One of the leading global exchanges Crypto.com has announced its decision to delist Tether’s USDT stablecoin for Canadians in order to comply with instructions from the Ontario Securities Commission (OSC), an independent agency responsible for regulating the capital markets in Ontario. Starting from January 31, USDT will no longer be available for Canadian residents on Crypto.com, and all the transactions involving the stablecoin will be suspended. The remaining USDT balance will be converted to USDC.
The exchange announced its decision in an email to its users.
According to Crypto.com spokesperson, the action follows increasing the scrutiny of centralized exchanges around the world, and Canada is not an exception. In December, the Canadian Securities Administrators (CSA) announced strengthening its approach to oversight of crypto trading platforms by expanding existing requirements for platforms operating in Canada.
The press release reads:
“The CSA continues to monitor and assess the presence and role of stablecoins in Canadian capital markets. As a result of this ongoing work, the CSA is of the view that stablecoins, or stablecoin arrangements, may constitute securities and/or derivatives. Crypto trading platforms that are registered or that have entered into a pre-registration undertaking are reminded that they are prohibited from permitting Canadian clients to trade, or obtain exposure to, any crypto asset that is itself a security and/or a derivative.”
In addition, CSA reminded that crypto trading platforms are required to have ‘established policies and procedures to determine whether each crypto asset they provide exposure to is a security and/or derivative.’
In its 2022-2025 Business Plan, CSA set out six strategic goals, and one of them is related to stablecoins. The CSA aims to monitor and assess the presence and role of stablecoins in Canadian capital markets and work collaboratively to identify and respond to regulatory implications and risks.
Tether (USDT) Under Scrutiny
Although Tether remains the largest stablecoin with $66.28 billion in market cap, it is still affected by the collapse of Terra/ Luna USD and the crash of FTX exchange that took place in 2022. Following the failures, regulators around the world agree that Tether needs to be given the right transparency.
Back in September 2022, we reported about the order by New York Judge Katherine Polk Failla for Tether to come forward with documents to prove its USDT backing. Those included balance sheets, general ledgers, cash-flow statements, income statements, and profit and loss statements. The order also required Tether to share details about the accounts it holds at crypto exchanges Bitfinex, Poloniex, and Bittrex.
Further, Coinbase Inc (NASDAQ: COIN) exchange called its users to the conversion of their USDT stablecoins to USD Coin. It even waved the conversion fees to zero.