Paxos is planning to leave Canada due to regulatory uncertainties

By: Michael Wilson

Paxos is planning to leave Canada due to regulatory uncertainties

April 13, 2023 7:36 AM

Paxos informed consumers that their cash would "stay safely" in their accounts, but recommended them to withdraw any remaining sums as soon as possible.

Paxos, a blockchain-based solutions provider for the global financial industry, has stated it will no longer be operating in the Canadian market.

The firm issued→ a statement telling clients that, beginning June 2, they will no longer be able to transact from their Paxos accounts, with the exception of withdrawing funds. It's part of Paxos's plan to "re-enter the Canadian market in conjunction with the Ontario Securities Commission (OSC) at a future date," as stated in a recent press release.

In addition, Paxos guaranteed in their announcement that their customers' funds would "stay safely" in their accounts and be reflected on their balances. However, the business has advised users to withdraw all amounts from their accounts as soon as possible. Clients with no funds in their accounts will have their accounts canceled automatically on May 9.

However, after June 2, clients who still have funds in their Paxos accounts will be able to gain access to it and withdraw it. Yet they won't be able to use Paxos's full trading functionality. Customers should wire their fiat balances to bank accounts linked to their "itBit account" or transfer digital assets kept in their accounts to external wallets, according to Paxos.

Paxos' decision to depart the Canadian market comes at a time when the country's rules on cryptocurrency platforms have been tightening in recent months. The Canadian Securities Administrators (CSA) issued a notification on February 22 requiring crypto exchanges to engage into new legally binding agreements while awaiting registration with the regulatory body. The amended undertaking includes a provision prohibiting the purchase or deposit of Value Referenced Crypto Assets, or stablecoins, through crypto contracts without prior written clearance from the CSA.

Paxos is hardly the only company that have left Canada in recent months. OKX notified Canadian consumers via email on March 20 that the cryptocurrency exchange "would no longer provide services or enable users to establish new accounts in Canada beginning on March 24, 2023, 12:00 AM EST" due to "new legislation."

On April 7, cryptocurrency derivatives exchange dYdX announced plans to discontinue services in Canada, beginning with the onboarding of new Canadian users. The exchange will switch all existing Canadian users to "close-only mode" on April 14, allowing them to only withdraw funds.