Bybit, the cryptocurrency exchange, has halted all its services and products being offered in Canada until further notice due to regulatory developments in the country. The exchange announced on May 30 that Canadian nationals and residents of the country would no longer be able to open new accounts with the exchange starting May 31. Bybit stated that existing customers could continue to use Bybit services and products until July 31, at which point the exchange would end support for all its services in the country. However, customers would not be able to increase their positions after the deadline, but they would still have access to their funds and could withdraw them or reduce their position. Canadian customers would have until September 30 to wind down their positions, and failure to do so would result in the automatic liquidation of any and all open positions in margin products and derivative contracts.
Regulatory Developments
Bybit’s decision to halt services in Canada is due to the recent regulatory development in the country. Canada moved to impose new regulations for the crypto industry in February and gave exchanges an ultimatum to comply or leave. Under the new rules, exchanges are not allowed to offer any form of leverage, including margin or credit. Additionally, exchanges are prohibited from allowing the purchase or deposit of stablecoins without prior written consent from regulators. The de-facto ban on stablecoins and leverage services is the primary driver behind the exodus of exchanges from the country.
Exchanges Leaving Canada
Bybit is the latest exchange to exit the Canadian market after Binance, OKX, dydx, and Paxos. Earlier in May, Binance announced a similar halting of services for Canadian customers, stating that the regulatory landscape meant operating in the country was no longer “tenable” for the exchange. OKX announced it would temporarily cease operations in the Canadian market in March, and a month later, in April, dydx and Paxos announced that they would no longer offer services in Canada. All three of them cited the new regulatory guidance as the prime reason behind their decision.
Compliance Route
Coinbase and Kraken have both reaffirmed their intent to continue operating in Canada and said they would comply with the new regulatory framework despite its drawbacks. Some exchanges are taking the compliance route and have welcomed more regulation for the crypto sector, even if it is restrictive. However, some exchanges, including Bybit and Binance, have decided to exit the Canadian market due to the stringent regulations.
Bybit has halted all its services and products being offered in Canada until further notice due to the regulatory developments in the country. Existing customers can continue to use Bybit services and products until July 31, at which point the exchange will end support for all its services in the country. Canadian customers will have until September 30 to wind down their positions, and failure to do so will result in the automatic liquidation of any and all open positions in margin products and derivative contracts.
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