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Cryptocurrency exchange OKX has announced that it will shutter its operations in Canada by June 2023 due to growing regulatory issues arising in the country.
OKX is currently the 8th largest cryptocurrency exchange in the world and is headquartered in Malta.
End Of Canadian Operations
OKX informed its users about the developments and its plans to shut operations in Canada via email, stating that users based in Canada will no longer be provided services or be able to open new accounts from the 24th of March, 2023. The exchange advised users to close all open options, along with margins, perpetual, and futures positions, by the 22nd of June, 2023. It also added that all fiat deposits must also be withdrawn by the dates it has communicated. The exchange stated in its email,
“OKX will no longer provide services or allow users to open new accounts in Canada starting on the 24th of March, 2023, 12:00 AM EST. “Your funds will remain safe in your account until you withdraw them. You will be able to withdraw dollars to your linked bank account and cryptocurrency to your self-custody wallet or your cryptocurrency account on another exchange.“
The exchange stated that its withdrawal from Canada is only temporary and that it will continue to work with regulators to solve the problem around its operations. Staff stated that they hoped to see their customers again soon. Recently, cryptocurrency announced that it was halting operations in Canada and off-boarded its users in Canada on the 29th of July, 2022. The exchange, like OKX, gave advance notice to its users about its intentions to stop operations and cited unfavorable regulatory developments as reasons for the move.
Growing Regulatory Concerns
Like Bittrex Global, OKX also highlighted growing regulatory issues as the reason for its move to halt operations. However, it has not stated what rules led to its decision and how it was engaging with the authorities. The Canadian Securities Administrators (CSA) had, on the 22nd of February, published a notice stating that crypto exchanges were required to sign new, legally binding undertakings while registering. The new undertakings cover several items, including prohibiting the purchase or depositing of Value Referenced Crypto Assets or stablecoins through crypto contracts without the prior consent of the CSA.
According to the CSA, these undertakings would enhance investor protection. The notice stated,
“If a CTP is unable or unwilling to provide an enhanced pre-registration undertaking, the CSA expects it will take appropriate action to off-board existing Canadian users and impose restrictions to prevent Canadian users from accessing its products or services.”
Crackdown On Exchanges
Regulatory authorities have launched a major crackdown on cryptocurrency exchanges operating in Canada, pushing a host of new regulatory hurdles. As of January, none of the top ten cryptocurrency exchanges by market capitalization were authorized to operate in Canada. Crypto exchanges KuCoin and Poloniex are entirely banned from operating within Canadian borders. Cryptocurrency exchanges that wish to onboard users in Canada are also required to register with regulators.
On the 22nd of June, 2022, ByBit and KuCoin were fined millions of dollars by the Ontario Securities Commission after it determined that both platforms were operating in a non-compliant manner in the country.
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.