Gemini follows Binance and OKX in departing Canada

Crypto exchange Gemini has announced its exit from the Canadian market, joining several other platforms that have exited due to the country’s strict regulatory environment.

Canadian customers of the Winklevoss-based exchange reported receiving an email asking them to withdraw their funds by Dec. 31 and be given 90 days to move their assets.

According to the Sept. 30 announcement, all accounts in Canada will be closed by the specified deadline “with limited exceptions.” Users were asked to withdraw their crypto and fiat balances.

The move comes as a surprise, given that the exchange has previously identified Canada as a “key market” for its international expansion. Gemini’s decision to leave Canada mirrors that of other major platforms such as Binance, OKX, dYdX and Bybit, which have struggled to navigate the regulatory environment.

These exchanges cited the complexity and cost of complying with Canadian regulations as primary factors in their decision to exit the market.

Currently, some global platforms such as Coinbase, Crypto.com and Kraken are among the platforms still operating within Canadian borders.

Restrictive regulations

In particular, the regulatory environment began to tighten in February 2023, when the Canadian Securities Administrators required all crypto exchanges operating in the country to sign legally binding pre-registration commitments. This comes on top of existing restrictions, including a ban on offering margin trading to Canadian users.

The regulations aimed to strengthen investor protection and bring greater transparency to the crypto sector, but also imposed strict limits on certain activities in the crypto market.

Because the CSA considers some stablecoins to be securities or derivatives, exchanges are prohibited from offering stablecoins or value-referenced crypto assets through contracts without prior approval. This regulation was one of the most difficult regulations for platforms to comply with.

Some exchanges, such as Bybit and KuCoin, have also been fined by the Ontario Securities Commission for operating without proper registration.

Although Gemini initially complied with these regulations by submitting its pre-registration in April 2023, it ultimately decided to cease operations in Canada.

With exchanges like Gemini bowing out, Canadian users have fewer ways to access the decentralized market as crypto regulations become tighter by the day.

On April 17, 2024, the Canadian government launched a new Cryptoasset Reporting Framework that will come into force in 2026; This framework will require all cryptocurrency service providers, including exchanges, brokers and ATM operators, to report detailed transaction data annually.

Additionally, the framework requires service providers to disclose customer-specific information such as names, residential addresses and taxpayer identification numbers.