Dubai-headquartered crypto exchange Bybit has announced that it would exit Canada due to the recent regulatory developments in the country, halting all its operations. With the move, the company joined other crypto-related firms, including Binance, OKX, Deribit, Blockchain.com, dYdX, and Paxos, that withdrew from the Canadian market for the same reason. - Canadian users will not be able to open new accounts on Bybit as of May 31.
- Existing customers will be able to continue to deposit new funds, enter into new contracts, and increase their positions until July 31.
- The remaining positions will be liquidated after Sept. 30, though the investors will be able to withdraw their funds or reduce the existing positions after the closure date.
- The move came nearly three and a half months after the Canadian Securities Administrators (CSA) published a notice requiring crypto exchanges to sign legally-binding commitments while waiting to be registered with the regulatory body.
- The pre-registration process confronts crypto exchanges with the risk of potential enforcement action if they do not comply with the new rules.
- The rules include investor limits, mandatory registrations, and a new stablecoin regulation that bans crypto exchanges from allowing users to buy or deposit stablecoins, which it classifies as a security, in the country without obtaining prior approval from the CSA after passing the due diligence checks.
- Bybit said it always primarily aims to operate in compliance with all relevant rules in Canada, but the new regulations made it infeasible.
- On the other hand, several other crypto exchanges like Coinbase and Kraken signed the pre-registration undertaking with the Canadian regulators to continue operating in the country, hinting at their intention to comply with the upcoming regulations.
- In June 2022, Bybit was fined by the Ontario Securities Commission in Canada over violating securities laws and operating unregistered crypto asset trading platforms.
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