Crypto exchange OKX has announced that it will no longer be serving users or accepting new account requests from Canada. In a recent email sent to its Canadian users, OKX asked them to close any open positions in options, perpetual, all margined positions, and futures by Jun. 22, 2023, 12:00 AM EST. The exchange also requested its users to withdraw fiat currency or tokens in their accounts before the given date.
While the exchange has assured its Canadian users that their funds would remain safe until they withdrew them, it’s important to note that this withdrawal from the Canadian market is only temporary. According to the company, this step has been taken to allow regulators to address the ‘new regulations’ issue. In their email, the OKX official wrote, “We hope to see you again. Stay tuned.”
This isn’t the first time a cryptocurrency exchange has ceased serving Canadians due to regulatory developments. Bittrex Global, another cryptocurrency exchange, ceased serving Canadians on Jul. 29, 2022, after providing advance notice on the same regulatory grounds.
The Canadian Securities Administrators (CSA) published a notice on Feb. 22 asking all crypto exchange platforms to agree to legally binding undertakings while they wait to be registered with the agency. These new undertakings involve many regulations, including “buying or depositing Value Referenced Crypto Assets (commonly referred to as stablecoins) through crypto contracts without the prior written consent of the CSA.”
However, the changes might not affect stablecoin USD Coin (USDC). The agency stated that investor protection provisions and level-playing-field concerns are the main drivers of these reforms. Regulators require all cryptocurrency exchanges to register with them before getting into the Canadian market.
These regulations have already brought fines to various cryptocurrency exchanges, such as Bybit and KuCoin, which incurred millions of dollars in fines after the Ontario Securities Commission (OSC) found them guilty of onboarding Canadians without registering as compliant platforms in the country.
All crypto asset trading platforms are expected to provide the CSA with an updated pre-registration undertaking based on the CSA pre-registration undertaking template and implement the systems in the agreement.
In summary, OKX’s announcement to cease operations in Canada is yet another example of how regulatory developments are impacting the cryptocurrency industry. While it’s a temporary step, it’s crucial for the exchange to comply with Canadian regulations before it can resume serving its Canadian users.