Paxos, a fintech company that provides blockchain-based solutions to the global financial industry, has announced its decision to exit the Canadian market.
The company issued a statement informing customers that starting June 2, they will no longer be able to use their Paxos accounts to trade, except to withdraw funds. The move comes as Paxos continues to assess "its readiness to re-enter the Canadian market in partnership with the Ontario Securities Commission (OSC) in the future."
The announcement also said that customers' funds will remain "safely" in their accounts and will be reflected in their account balances, protected by Paxos' terms and conditions. However, the company has urged customers to withdraw all balances from their accounts "as soon as possible". Customers without any funds in their accounts will have their accounts automatically closed on May 9th. On the other hand, customers who maintain balances in their Paxos accounts will still be able to access and withdraw funds after June 2. However, they will not have full access to the Paxos platform to initiate new transactions. Paxos advises customers to wire their fiat balances to a bank account associated with an "itBit account" in their name, or to transfer digital assets held in their account to an external wallet.
Paxos’ decision to withdraw from the Canadian market comes as Canada has been tightening regulations on cryptocurrency platforms in recent months. On Feb. 22, the Canadian Securities Administration (CSA) issued a notice requiring cryptocurrency exchanges to enter into new legally binding agreements while they await registration with the regulator. The updated pledge includes provisions prohibiting the purchase or deposit of value referenced to crypto assets or stablecoins through crypto contracts without written authorization from the CSA. Paxos isn't the only company to exit the Canadian market in recent months. On March 20, OKX notified Canadian users via email that due to "new regulations," the cryptocurrency exchange "will no longer provide services or allow users to open new account."
On April 7, cryptocurrency derivatives exchange dYdX announced plans to end service in Canada, starting with halting the introduction of new users in the country. On April 14, the exchange switched all existing Canadian users to “closed only mode,” allowing them to withdraw funds only.
