(Kitco News) – As digital assets gain global acceptance, Canadian cryptocurrency users face shrinking access as Gemini plans to close all customer accounts in Canada by the end of 2024.
“Effective December 31, 2024, Gemini will close all customer accounts in Canada with limited exceptions. As a result, we will be closing your Gemini account,” the exchange wrote in an email that was sent to its clientele based in Canada.
The email went on to let these customers know that they “have 90 days starting on September 30, 2024, to remove [their] assets from the Gemini platform.”
“Please withdraw your assets by December 31, 2024, as Gemini will close your account after that date,” the email read. “Prior to December 31, 2024, please take the below actions: Withdraw any crypto asset to an external wallet address; and Withdraw any fiat to your linked bank account.”
Gemini’s unexpected move to exit the Canadian market follows the February notice issued by the Canadian Securities Administrators (CSA), which introduced rules for crypto exchanges and trading platforms operating on Canadian soil. The notice required all crypto asset trading platforms (CTPs) to sign a legally binding pre-registration undertaking (PRU) to continue operating in the country.
Among the restrictions laid out in the PRU were rules dealing with stablecoins, which the regulator refers to as value-referenced crypto assets (VRCA). As explained in the notice, exchanges are prohibited from allowing Canadian clients to buy or deposit stablecoins without prior approval from the CSA.
“In light of recent insolvencies involving a number of CTPs, including Voyager Digital, Celsius Network, the FTX group of companies, BlockFi, and Genesis Global (collectively recent CTP insolvency events), we are introducing important new investor protection provisions into the standard form of PRU,” wrote the CSA.
Initially, the CSA restricted the trading of stablecoins, suggesting that stablecoins may be categorized as securities or derivatives. The regulator later clarified it may allow trading of certain stablecoins, subject to terms and conditions, including transparency and qualified custodian services.
On September 26, the CSA released an update that was distributed to all CTPs, informing them that the deadline by which they would no longer be allowed to offer stablecoins that do not comply with applicable terms and conditions by the CSA had been extended to December 31, citing technical issues in compliance.
The extension is intended to give CTPs more time to either comply with the terms and conditions of their registration or PRUs or propose alternatives that address investor protection concerns, the CSA wrote.
“Even if a specific VRCA meets the terms and conditions of an applicable registration, exemptive relief decision or PRU, it does not mean the CSA approves or endorses the VRCA, endorses its safety, or that it is compliant with Canadian securities laws,” the CSA said.
Gemini was one of the first exchanges to respond to the February notice and filed its pre-registration on April 13, with a spokesperson from the exchange saying Canada was “one of the most important and developed markets in the Americas” and had played an “essential role in Gemini’s international expansion.”
It’s unclear what changed between then and now to prompt the closing of all Canadian-based accounts. Kitco Crypto reached out to Gemini for a comment on the matter but had yet to receive a response at the time of publication.
Ever since the notice was distributed to exchanges, Binance, the world’s largest crypto exchange, as well as OKX, dYdX, Paxos, and Bybit, have all left the Canadian market.
Some on social media have speculated that many of these exchanges chose to exit the market because they prefer to use stablecoins as their main trading pairs. Others have highlighted the fact that USDT, the largest stablecoin by market cap, is not allowed as part of the restricted dealer’s license, which was likely a deal breaker for certain exchanges, like Binance.
According to official records, there are currently 12 crypto exchanges authorized to provide services in the country, including Bitbuy Technologies, Coinbase Canada, Coinberry, Fidelity Clearing Canada, Netcoins, Newton Crypto, Shakepay, and Wealthsimple Investments, among others.
Firms that have filed PRUs and are awaiting approval include ByteX, Crypto.com, DigiFinex, Kraken, NDAX, Satstreet, and Uphold.
“Filing a PRU does not mean a platform will be granted registration,” the CSA said, noting that PRUs still contain “important investor protection commitments” from unregistered crypto asset trading platforms.
Exchanges that are expressly prohibited from serving Canadians include companies like Catalyx, CoinEx Global, KuCoin, Poloniex, XT.com, and LiquiTrade.
