Gemini, a popular U.S.-based crypto exchange founded by the Winklevoss twins in 2014, has made the decision to exit the Canadian crypto market. This move comes amidst increasing regulatory pressure in Canada, with the exchange announcing on 1 Oct 2024 that it will be shutting down accounts belonging to Canadian users. Canadian customers have been advised to withdraw their funds before the deadline of 31 Dec 2024, giving them only 90 days to transition away from the Gemini platform.
While the leadership of Gemini has not provided a specific reason for this decision, it is widely believed that the increasing regulatory scrutiny in Canada played a significant role. The Canadian Securities Administrators (CSA) recently mandated that all crypto platforms sign a pre-registration undertaking (PRU) in order to continue operating in the country. This directive was put in place to safeguard crypto investors following the insolvencies of several digital asset trading firms in 2022, including Voyager, Celsius, and FTX.
Canada has a reputation for maintaining a relatively progressive regulatory environment for cryptocurrency. The country officially recognizes crypto as legal financial assets, requiring trading platforms to register with regulatory bodies like the Financial Transactions and Reports Analysis Centre of Canada (FINTRAC). Anti-money laundering (AML) and know-your-customer (KYC) regulations are strictly enforced on crypto platforms. While Canada encourages innovation in blockchain technology, it also upholds strict oversight to prevent illicit activities. Provincial regulators, such as the Ontario Securities Commission (OSC), play a crucial role in overseeing crypto exchanges and ensuring compliance with regulatory standards.
The decision by Gemini to exit the Canadian market highlights the challenges faced by crypto exchanges operating in jurisdictions with evolving regulatory landscapes. As the industry continues to mature, compliance with regulatory requirements will be paramount for crypto platforms looking to maintain a presence in key markets like Canada.