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In a big blow to Canadian users, dYdX has announced that its decentralized derivatives exchange would no longer be accessible to users in Canada.
According to the platform, trading support for customers will end on the 14th of April, 2023.
Canadian Operations On Ice
In a blog post published on its website, dYdX stated that new users would not be able to join the platform, and trading support for existing customers would cease in a week.
“On April 7th at 17:00 UTC, dYdX will no longer allow new users located in Canada to onboard to the exchange. As part of the wind down process, we want to provide existing Canadian users ample time to manage and close their positions on dYdX. Therefore, existing users will be able to continue to execute trades on our platform for one week.”
It also stated that the platform would be moving all existing users that fall under Canadian jurisdiction to “close-only” mode. However, users would retain the ability to withdraw their funds at any given time.
“On the 14th of April at 17:00 UTC, dYdX will move all existing users in Canada to close-only mode, and users will maintain the ability to withdraw funds from the protocol at any time.”
Crippling Regulatory Environment
On the question of why the exchange has decided to shutter its operations in Canada, the exchange cited a highly unfavorable regulatory environment. Canada has, in recent times, adopted a highly restrictive approach to cryptocurrency exchanges and operations based in Canada. The collapse of the Sam Bankman-Fried-led FTX further exasperated this. Canadian regulators are expected to release updated regulatory guidance in the near future. The dYdX team stated,
“As always, dYdX is committed to providing transparency around product decisions and democratizing access to financial opportunity. We hope that the regulatory climate in Canada will change over time to allow us to resume services in the country.”
Canadian regulators had recently announced further restrictions on cryptocurrency exchanges operating in Canada. This included restrictions on the registration requirements of these exchanges. The rules stated that Canadian clients could not be allowed to enter into crypto contracts to purchase or sell any crypto asset that could qualify as a security or derivative.
dYdX had recently come under considerable flak thanks to a promotion offered by the derivatives exchange. Under the promotion, users could get a $25 bonus for confirming their identity via webcam. Critics called the program a bait for more information. The exchange eventually shuttered the program, citing high demand rather than acknowledging privacy concerns.
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.