Gemini to Exit Canadian Market by Year-End Amid Tough Regulatory Environment

Gemini is shutting down its operations in Canada by the end of this year. They sent an email to customers on Monday, urging them to withdraw their assets before December 31, 2024.

This move adds Gemini to a growing list of exchanges leaving the Canadian market due to tough regulations.

While the company didn’t specify why they’re exiting, they have given Canadian customers a 90-day notice to pull out their holdings. This decision comes after the Canadian Securities Administrators (CSA) required all platforms to sign a pre-registration undertaking (PRU) to keep operating in Canada. The CSA aims to protect investors, especially after the collapses of firms like Voyager, Celsius, and FTX in 2022.

The CSA stated, “Investors have experienced significant harm from the collapse of unregulated VRCAs and other market disruptions.” They also noted that they’re not aware of any regulated VRCAs being traded in Canada.

The new regulations include rules on how exchanges interact with customers. Plus, Canadian users can’t trade stablecoins without CSA approval.

Gemini had signed the PRU and completed its filing, showing their intent to comply. They viewed Canada as an important market for growth, so their decision to withdraw surprised many customers.

Initially, regulators set an October deadline for compliance but later extended it to the end of 2024. Gemini’s exit fits this revised timeline.

The CSA has been engaging with crypto trading platforms and is open to proposals to address investor protection concerns. They recently extended the compliance deadline to December 31, 2024.

If exchanges fail to comply with CSA regulations, they could face significant penalties. This could lead to customers losing access to certain products. Currently, only a few platforms, like Kraken and Coinbase, continue to operate under these strict rules.

As Gemini prepares to leave Canada, they join Binance, Bybit, and Paxos, which have already exited. Binance left over a year ago, citing Canada’s challenging regulatory environment but remains hopeful about returning. They said, “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.”

Other platforms that have exited due to new regulations include OKX, Blockchain.com, and Deribit.