Bybit Latest to Flee Canada, but Not All Exchanges Are Leaving

Bybit has become the latest crypto exchange to exit Canada citing “recent regulatory development.”

In a Tuesday blog post, Bybit told Canadians that by Wednesday, May 31, the entity would not be able to open accounts on its platform. Further, existing Canadian Bybit users will no longer be able to make deposits or trade after July 31. Bybit advised those users to close out their positions by September 30. After that, they will be liquidated.

This comes as a myriad of other crypto exchanges are leaving Canada because of the regulatory environment in the country. Notable exits to date include Binance, OKX, Paxos, dYdX and Bittrex.

Most coincide with the Canadian Securities Administrators urging crypto trading platforms to begin the process of registering with them or cease operations.

Under the CSA’s “pre registration undertakings,” firms have to agree to segregation in crypto custody, and they must have a chief compliance officer on staff. They must also eliminate leveraged trading and not allow users to trade or hold stablecoins.

Many firms that weren’t already registered with the state have decided to forego those requirements, which were due by March 23, and simply leave the country behind.

But not all exchanges have followed the same path, with some committed to succeeding in a regulated Canadian market.

Coinbase

The largest crypto exchange based in the US still wants a relationship with its neighbors to the north. More importantly, it wants a piece of Canada’s expected $1.42 billion in crypto revenue in 2023, per Statista.

Coinbase Canada signed a pre-registration undertaking (PRU) on March 24 and pledged to work with Canadian regulators to build a strong “regulatory framework.”

“We applaud the Canadian securities regulators’ efforts to bring clarity to the industry and look forward to continuing our collaboration with them on regulation that protects consumers while embracing innovation,” Coinbase wrote in a March 30 statement.

Since then, Coinbase has continued to be effusive in its praise of Canadian regulators. For example, Nana Murugesan, Coinbase vice president of international and business development, told CoinDesk on May 19 that Canada’s approach is far better than America’s because in America, the rules aren’t clear.

“There’s a couple of ways we see regulators acting: one is regulation by engagement; the other one is regulation by enforcement,” Murugesan said. “The latter part is tough, because you don’t know what the rules are. But the Canadian regulator is definitely the former, which is regulation by engagement – which we love.”

Kraken

Like Coinbase, Kraken wasn’t content with abandoning the Canadian market. On March 30, Kraken announced that it too had filed a PRU with regulators.

In its press release, Kraken pointed to an OSC survey from October 2022 that found that 31% of Canadians plan to buy crypto assets in the next year. Though, the survey also showed that nearly half weren’t planning on purchasing any sort of crypto in the next 12 months.

Gemini is another US-based crypto exchanges that has filed a PRUs with the CSA.

BitBuy

BitBuy is one of Canada’s top crypto exchanges and is based in the country, so it was brought under the regulatory umbrella earlier than Coinbase, Kraken and Gemini.

BitBuy was founded in 2016 and was the first trading platform to become a regulated crypto marketplace and restricted dealer in Canada.

Shakepay

This Montreal, Canada-based crypto exchange filed a PRU with the CSA on March 24 like many others on the list.

Shakepay tweeted on Tuesday that it’s now a regulated exchange in Canada.

The Ontario Securities Commission has listed Shakepay as one of a number of firms that are permitted to offer crypto products to Ontario residents. Others include Fidelity Digital Assets, Coinsquare, and Newton Crypto.