Paxos Announces Withdrawal from Canada: Details
- Blockchain infrastructure platform Paxos has announced its withdrawal from Canada and stated that it will re-enter the market at a later date.
- It was confirmed that the users of the platform will not be able to continue their transactions starting June 2, but withdrawals will remain live.
- The company advised users to withdraw immediately, adding that if a user’s account does not have funds, it will close automatically on May 9.
- The popular decentralized crypto exchange (DEX), dYdX, also announced its departure from the region this week, citing an unfavorable regulatory climate.
Crypto and blockchain have become increasingly popular in Canada, a region known for having strict regulations for digital assets. However, the crypto industry in the region seems to be suffering due to a lack of regulations and a less crypto-friendly environment for companies to grow in. It is crucial to note that the well-known blockchain infrastructure platform, Paxos, has announced its withdrawal from Canada, after recently confirming exposure to bankrupt cryptocurrency bank, Silvergate Bank.
According to a statement released by the company a few hours ago, Paxos will end its operations in Canada, and it was confirmed that the users of the platform will not be able to continue their transactions starting June 2. However, withdrawals will remain live on the crypto platform after June 2 as well.
As per the statement, Paxos is currently assessing “its readiness to re-enter the Canadian market in cooperation with the Ontario Securities Commission (OSC) at a future date.” Furthermore, the firm confirmed that if a user’s account does not have funds, it will close automatically on May 9.
“If you maintain a balance in your Paxos account, we ask that you withdraw all balances from your account at your earliest convenience. Beginning June 2nd your account will be disabled. At that time, you will still be able to access and withdraw your funds; however, you will not have full access to Paxos’ platform to initiate new trades,” said the fintech firm.
The New York-based company advised its customers in Canada to immediately withdraw their funds to another platform or wire their fiat balances to bank accounts linked to their “itBit account” that is under their name. Interestingly, itBit is a growing crypto exchange that was created and is managed by Paxos itself.
The decision to end operations in Canada by Paxos comes at a time when the regulators in the region are tightening their grip on blockchain technology and digital assets. The Canadian Securities Administrators (CSA) published a notice on Feb. 22 describing new rules for crypto companies to operate in the region.
The CSA has asked crypto companies to sign legally binding documents as they wait for registration with the regulatory body. The documents include a clause that forbids buying or depositing Value Referenced Crypto Assets, or stablecoins, via crypto contracts without written authorization from the CSA.
Interestingly, Paxos is not the only crypto exchange to leave the Canadian market. As earlier reported by Bitnation, popular decentralized crypto exchange (DEX) dYdX also announced its departure from the region earlier this week, citing the unfavorable regulatory climate in Canada as the reason for doing so. In the blog post, the DEX confirmed that “dYdX will move all existing users in Canada to close-only mode, and users will maintain the ability to withdraw funds from the protocol at any time.”
On the other hand, Paxos has landed in trouble with the United States Securities and Exchange Commission (SEC), which sued the fintech firm in February over Binance USD (BUSD), a stablecoin pegged in a 1:1 ratio to the US dollar. The regulator believes that BUSD is an unregistered security.
A crypto journalist with over 3 years of experience in DeFi, NFT, metaverse, etc. Parth has worked with major media outlets in the crypto and finance world and has gained experience and expertise in crypto culture after surviving bear and bull markets over the years.
