Gemini will shut down operations in Canada by the end of the year, according to a Monday email sent to customers. The exchange urged customers to start withdrawing their assets before December 31, 2024.
Gemini adds to the list of exchanges that have fled from the Canadian market amid tough regulatory conditions.
Gemini To Exit the Canadian Market
The exchange did not explicitly indicate the reason for its move to exit the Canadian market. Nevertheless, customers in Canada have a 90-day notice to withdraw their holdings with the Gemini.
The decision comes only months after the Canadian Securities Administrators (CSA) instructed all platforms to sign a pre-registration undertaking (PRU) as a condition of continuing to operate in the country. The CSA said the directive was intended to protect investors, citing the insolvencies of crypto firms like Voyager, Celsius, and FTX that spanned 2022.
“Investors have experienced significant harm from the collapse of unregulated VRCAs, other VRCA market disruptions, and the activities of unregistered crypto market participants. While other international jurisdictions are developing payment-based, banking-based or hybrid regulatory regimes for certain types of VRCAs, the CSA is not aware of any such regulated VRCAs being traded in Canada,” the regulator said.
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The directive includes regulations governing exchange-to-customer interactions and bans Canadian users from trading stablecoins without approval from the Canadian Securities Administrators (CSA).
Gemini signed the Pre-Registration Undertaking (PRU) and completed its filing, indicating compliance. The exchange viewed Canada as a key market for its international expansion. However, its recent decision to exit the Canadian market surprised customers.
Initially, regulators set an October deadline but later extended the compliance timeline to the end of 2024. Gemini’s decision to withdraw aligns with this revised schedule.
“The CSA has actively engaged with CTPs and crypto industry participants and remains open to proposals for alternative ways to address investor protection concerns raised by VRCAs.To that end, the CSA is further extending the October 31 deadline to December 31, 2024,” an excerpt in the September update read.
Failure to comply with the Canadian Securities Administrators (CSA) regulations could result in significant penalties for exchanges. For customers, this means potential loss of access to certain products. The CSA’s website indicates that only a few platforms, like Kraken and Coinbase, continue to operate under its stringent rules.
As Gemini prepares to exit the Canadian market, it joins Binance, Bybit, and Paxos, which have already withdrawn. Binance, which left over a year ago, attributed its exit to Canada’s challenging regulatory environment but expressed optimism about a potential return.
“We are confident that we will someday return to the market when Canadian users once again have the freedom to access a broader suite of digital assets,” Binance shared on X.
Read more: Crypto Regulation: What Are the Benefits and Drawbacks?
Other platforms that exited due to amended regulations include OKX, Blockchain.com, and Deribit.
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