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Gemini, the cryptocurrency exchange founded by the Winklevoss Twins, is leaving Canada.
The exchange has instructed customers of its plan to close all Canadian accounts. Canadian investors have until December 31, 2024, to transfer their funds from Gemini.
Canadian Crypto Rules Tighten
Gemini’s exit comes after the Canadian government introduced stricter regulations for crypto exchanges earlier this year. The platform had initially filed its pre-registration undertaking in April, expressing optimism about continuing operations in Canada.
🇨🇦 Crypto exchange @Gemini to close all customer accounts in Canada. 👀 pic.twitter.com/nfKzPjm2Rq
— Crypto Crib (@Crypto_Crib_) October 1, 2024
In early 2023, Canadian authorities introduced new rules to regulate crypto trading platforms more strictly. The Canadian Securities Administrators (CSA), the country’s financial watchdog, released a set of guidelines requiring all exchanges to sign a legally binding agreement known as a pre-registration undertaking (PRU) to continue operating in Canada.
These regulations impose several limitations, particularly on stablecoins, which require approval before they can be bought or traded in Canada.
The new rules were a response to a series of insolvencies in the crypto world involving companies like FTX, Celsius, and Voyager Digital.
The CSA emphasized that these changes were meant to protect investors and prevent future crises.
Despite the regulatory hurdles, some exchanges, such as Kraken, have committed to operating under the new rules, but others have chosen to exit the Canadian market altogether.
The Canadian crypto market itself presents a unique scenario. According to a 2023 report about crypto ownership in the country, retail ownership declined by 23%.
Many of those who invested in digital assets like Bitcoin and Ethereum also expressed regret over their investments. This has led to a decline in retail interest in digital assets.
Gemini’s Exit and the Wider Crypto Market
These regulatory changes and trends are occurring against the backdrop of global scrutiny of the cryptocurrency sector as more nations seek to tighten the rules that govern these firms. As nations grapple with how best to regulate the market, Canada’s approach serves as a case study.
The exodus of big-name players like Gemini and Binance (which shut down operations in 2023) raises the question of how best to balance innovation with regulation.
Binance cited compliance and a strict regulatory environment as reasons for its departure.
$QUACK #RICHQUACK News:
With 🇨🇦 #Binance📷 shuts down operations in Canada, it's clear that Canada exemplifies the necessity for #decentralization in finance:
– Canada imposed restrictions on protestors by freezing their bank accounts.
– Canada set an annual limit for… pic.twitter.com/h71ned3TVs— RichQuack (@RichQuack) May 18, 2023
Other exchanges, including OKX, dYdX, Bybit, and Paxos, withdrew from the country following the introduction of the new rules.
While several major exchanges are leaving, other firms such as Kraken and Coinbase, are determined to remain in Canada and operate under the new rules.
