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Lynn Johannson, President of E2 Management Corporation and Catalyst for THE Collaboration
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Coinbase Canada Suspends Stablecoin Trading Shortly After Launch
News | August 18, 2023
Image: Unsplash/Behnam Norouzi
Coinbase, a global leader in cryptocurrency exchange services, recently made headlines with its official launch in Canada. However, just days after its debut, the platform has announced the suspension of trading for Tether (USDT), DAI, and RAI for its Canadian users.
Coinbase's entry into the Canadian market was highly anticipated, with the platform officially launching just a few days ago. The excitement was palpable, with Canadian crypto enthusiasts eager to explore the platform's offerings. The subsequent announcement of the stablecoin trading suspension has taken some by surprise, raising questions about the platform's strategy and the challenges it faces in the Canadian regulatory environment.
Why the Sudden Suspension?
While the timing is unexpected, the decision to suspend stablecoin trading is rooted in regulatory compliance. Coinbase Canada, Inc. is actively seeking registration in specific Canadian jurisdictions and has committed to adhering to regulatory requirements until the necessary permissions are secured.
See: Canadian Regulators Set Expectations for Crypto Asset Investment Funds: A Comprehensive Overview
On March 29, 2021, the OSC informed cryptocurrency trading platforms that they are required to reach out to the Staff to begin the registration procedure, otherwise they risk facing regulatory penalties. These mandates require exchanges to enter legally binding agreements that include restrictions on certain stablecoin transactions. This move underscores the regulatory body's intent to ensure consumer protection and financial stability in the face of the rapidly evolving crypto industry.
The OSC's Registered Firms and Pre-Registration Undertakings
The Ontario Securities Commission (OSC) has a list of crypto asset trading platforms that have received exemptive relief to offer crypto products to investors in Ontario. As of May 25, 2023, the following platforms are registered:
- Bitbuy Technologies Inc. (Bitbuy)
- Bitvo Inc.
- Coinberry Limited (Coinberry)
- Coinsquare Capital Markets Ltd.
- Fidelity Clearing Canada ULC (Fidelity Digital Assets)
- Fidelity Digital Asset Services, LLC
- Netcoins Inc. (Netcoins)
- Newton Crypto Ltd.
- Shakepay Inc.
- Simply Digital Technologies Inc. (CoinSmart)
- VirgoCX
- Wealthsimple Digital Assets Inc. (Wealthsimple)
See: Consultation Until Sep 20, 2023: OSFI Proposes New Guidelines for Crypto-Asset Exposures in Canada
Additionally, several platforms have entered into a pre-registration undertaking with the OSC. This allows them to continue operations while their registration applications are under review. Notably, Coinbase Canada, Inc. is among these platforms, along with others like ByteX, CatalX, Crypto.com, DigiFinex, Gemini, Kraken, NDAX, Satstreet, Shakepay, and Uphold.
Looking Ahead
Coinbase Canada's swift decision post-launch underscores the challenges crypto platforms face in navigating regulatory waters yet it highlights Coinbase's commitment to compliance and user safety. The crypto community in Canada and globally will be keenly watching how Coinbase navigates these challenges and what this means for the future of crypto trading in the region.
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