The US-based cryptocurrency exchange Coinbase has recently officially launched in Canada. “We proudly announce that we have officially started operations in Canada, marking a very important milestone in our international expansion strategy,” the company’s official website said on 14 August. Cryptocurrency regulations in the country are behind the opening of Coinbase to Canada. This development draws attention while Ripple’s lawsuit with the Securities and Exchange Commission (SEC) continues in the USA. Because Canada is known as a more “crypto-friendly” country than its neighbor, the USA.
Coinbase is not the only blockchain platform to enter the Canadian market; Gemini, Crypto.com and Kraken are also among the platforms that have identified Canada as their target market, taking into account the regulations.
In Canada, which has a population of 40 million, more than 4 million people are thought to have cryptocurrencies. A market survey conducted in October last year showed that 31 percent of Canadians plan to buy crypto assets this year. Cryptocurrency is gaining popularity in Canada at different stages of society, both individually and institutionally.
‘A MiCA-like development’
Coinbase CEO Brian Armstrong stated that doing business in Canada is much easier than in the USA, emphasizing that the regulations here are based on cooperation. Noting that larger regulations will support a stronger foundation in the crypto money industry, Armstrong continues his words as follows:
“I think positively that we will see clearer regulations, as in Europe. For example, comprehensive crypto regulation MiCA has passed in Europe, and we are seeing similar efforts in the UK, Singapore and Australia. I think it is on that path in Canada as well.”
The number of countries that have implemented cryptocurrency regulations is increasing. Photo: FreepikWhat do Canada’s crypto regulations cover?
Giving an example that the separation of crypto regulations into commodity and security-based in the USA created a war between the parties and ultimately the legislators acted politically, Armstrong states that they were able to have very creative conversations with lawmakers in Canada.
So, what exactly do the regulations Armstrong mentioned cover? Canadian General Manager of US-based cryptocurrency exchange Kraken, Mark Greenberg, states that Canadians have been excited about digital assets for a long time, reminding that the first Bitcoin ATM in the world opened in Vancouver in 2013.
The regulation of crypto trading activities in Canada is handled by two separate organizations. FINTRAC, the Canadian Center for Financial Transactions and Report Analysis, is responsible for verifying the legality of financial transactions and anti-money laundering rules. These rules prioritize the fight against crimes such as fraud, terrorist financing and money laundering.
Brian Armstrong, CEO of Coinbase. Photo: Wikimedia CommonsSecondly, the Canada Security Administration (CSA) and the Ontario Security Commission (OSC) are the main regulators in the country. These two institutions are responsible for protecting Canadian investors against unfair, inappropriate and fraudulent activities. The scope of activity of these institutions covers the sale and trading of crypto assets from the market infrastructure.
FINTRAC applies the same rules to crypto trading platforms as any other Canadian financial services company. The CSA, on the other hand, recently introduced new rules for crypto trading platforms only. The said rules are as follows:
-Separating and keeping assets of Canadian customers in a separate fund;
-Making risk disclosures to specific customers;
– Limiting the crypto assets that certain customers can buy;
-Imposing restrictions on the use of leverage and futures transactions.
Why did Binance leave Canada?
Of course, there are those who oppose these regulations. Canada’s crypto regulations have been criticized for being too difficult for crypto exchanges. Leading crypto exchanges such as Bybit and Binance pulled out of the country in May, citing “recent regulatory developments”. Bybit has announced that new Canadian accounts will not be opened, and Binance has announced that they have stopped the service for Canadians. When Coinbase CEO Brian Armstrong was asked about this recently, the businessman replied, “I can’t comment on other companies.”
Dean Skurka, chairman and CEO of Canadian-based cryptocurrency exchange WonderFi, says that the regulations came after the bankruptcy of platforms such as Voyager and Celcius in Canada, increasing the operating costs of the exchange. Pointing out that the crypto market should be consolidated in order to manage increasing costs, Skurka emphasizes that they welcome these regulations.
Sources: Bloomberg, Nasdaq.com, Betakit.com, Cointelegraph.com, Coinbase
