Paxos, a fintech firm that offers blockchain-based solutions for the global financial industry, recently made an announcement that surprised a significant portion of its customers. The company released a statement saying that it has decided to withdraw from the Canadian market.
It also used the statement to inform users that “Your funds remain safely in your account and are reflected on your account balance and protected by our Terms and Conditions; however, we ask that you withdraw all balances from your account at your earliest convenience. Beginning June 2nd, you will no longer be able to transact from your Paxos account, aside from withdrawing your funds.”
Users’ funds are safe, but they should be withdrawn as soon as possible
Paxos said that it would continue to assess its readiness to re-enter Canada at a future date in collaboration with Ontario Securities Commission.
Paxos wanted to reassure the users regarding the safety of their funds. According to the company, the money is safe in users’ accounts and will remain protected by Paxos until its owners withdraw it. With that said, the company still urged users to withdraw as soon as possible. Those who withdraw their balances will have their accounts automatically closed on May 9th.
Meanwhile, those who keep their money within the platform can still access and withdraw it after June 2nd. But, they will not have full access to the platform and will not be able to engage in new trades. Anyone with fiat balances should wire the money to bank accounts linked to their itBit account.
Crypto platforms are leaving Canada due to the new law
Paxos’ decision to leave Canada may have come as a surprise for many, but it does make sense, given the fact that Canada has been tightening its crypto regulations for months now. Crypto platforms were the primary target of the regulators during this period. For example, in February, the Canadian Securities Administrators (CSA) published a new notice that made it obligatory for crypto exchanges to enter a new, legally binding agreement while waiting for the regulator to approve their registration.
One of the new clauses even forbids them to buy or deposit Value Referenced Crypto Assets, which is the term that basically means stablecoins. At least, exchanges are forbidden from buying or depositing them using crypto contracts without the CSA’s written authorization.
Paxos is also not the only one who decided that the Canadian crypto market has become too unfriendly to stick around. In recent months, a number of others have announced their departure from the country, such as OKX, which revealed on March 20th that the new regulations had forced the company’s hand and that it will no longer offer services in Canada, or even allow users to open new accounts starting on March 24th.
Only a few days ago, on April 7th, dYdX — a well-known crypto derivatives exchange — also said that it would end its services in Canada. The platform will stop onboarding the local users and move all of its existing Canadian users to close-only mode on April 14th, which is tomorrow.