Cryptocurrency exchange Gemini is preparing to shut down all customer accounts in Canada by the close of 2024. In an email sent to its Canadian users on Sept. 30, 2024, the exchange notified customers that accounts would be terminated on Dec. 31, 2024. Users have been given a 90-day window to withdraw their assets.
“Starting Dec. 31, 2024, Gemini will be closing all Canadian customer accounts, with only a few exceptions. Therefore, your Gemini accounts will also be shut down,” the exchange stated in a statement.
This move comes several months after Canadian financial regulators tightened crypto-trading platforms and exchange regulations. All crypto-trading platforms were required to sign a legally binding preliminary registration undertaking to continue operating in Canada, according to a notice issued by the Canadian Securities Administrators (CSA) on Feb. 22, 2024.
The regulations also introduced several restrictions, including a rule that crypto exchanges must receive CSA approval before allowing Canadian customers to deposit or buy stablecoins. The CSA explained these changes were necessary to safeguard investors in light of several major insolvencies in the crypto industry, including those involving FTX, Voyager Digital, Genesis Global, Celsius Network and BlockFi.
Different exchanges reacted to these legislative adjustments in different ways. Gemini was one of the first to take action, filing its preregistration in April. Other exchanges, including Binance and Kraken, also announced that they had submitted their preregistration forms after the new rules were introduced.
However, Binance later decided to exit the Canadian market, announcing its departure on May 12, 2024. Several other exchanges, including Bybit, Paxos, OKX and dYdX, also chose to cease their operations in Canada following the regulatory shift.
Gemini’s decision to exit the market occurred shortly after the CSA announced a new update on Sept. 26, 2024, regarding the use of stablecoins, also referred to as value-referenced cryptocurrency assets (“VRCA’), on cryptocurrency trading platforms (CTPs).
The CSA extended the deadline for compliance on offering noncompliant stablecoins. Initially, exchanges were expected to meet the compliance deadline by April 30 this year. However, due to technical challenges in meeting these requirements, the CSA moved the deadline first to Oct. 31, 2024, and then extended it to Dec. 31, 2024.
The extension is designed to give cryptocurrency trading platforms more time to either meet the requirements of their preregistration or registration or propose alternative solutions that address the CSA’s concerns regarding investor protection.
The exodus from Canada illustrates why crypto industry actors in jurisdictions including the United States, such as Canaan Inc. (NASDAQ: CAN), are calling for the enactment of a regulatory framework that fosters industry growth while also protecting consumers, rather than policies that force entities to move their operations to other markets.
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