As a result of regulatory developments, many crypto platforms paused operations, and even some left providing services in certain countries due to strict regulations implied. In this case, OKX, one of the top crypto exchanges in the blockchain industry, became the latest victim of intense regulations designed by Canadian authorities.
OKX exchange notified its community via email that the platform would not allow opening new accounts and would cease its services in Canada by March 24, 2023. However, users will have time until June 22 to withdraw their fiat or crypto funds. The platform also pressed that users should close any position they opened in the margin, future, and perpetual before June 22.
OKX Cited Regulatory Change As A Reason Behind This Step
While pointing to the reason that pushed the platform to reach this decision, the crypto exchange cited strict regulation prepared by Canadian Securities Authority (CSA). The exchange further noted that its departure is temporary and hopes to welcome Canadian users back soon. According to the email, OKX is in talks with the regulatory authority to resolve an issue.
The crypto exchange assured that users’ funds are safe and added;
Your funds will remain safe in your account until you withdraw them. You will be able to withdraw dollars to your linked bank account and cryptocurrency to your self-custody wallet or your cryptocurrency account on another exchange.
Taking effect of the recent FTX fall, which further pushed several firms to file for insolvency, the Canadian Securities Administrator (CSA) issued a notice on February 22 requiring crypto exchanges to sign new Pre-Registration Undertakings (PRU). The agency mentioned that new undertakings are mandatory for the crypto exchanges currently looking to secure approval from the regulatory.
New Regulations Prohibit Buying Stablecoins Without Written Consent
One of the most significant undertakings introduced in the note is that crypto trading platforms (CTPs) must first conduct a consent in written form with CSA before “buying or depositing Value Referenced Crypto Assets” from crypto contracts. It typically includes stablecoins, whose value is pegged with dollars, among other products.
OKX is not the first crypto exchange going to step out of the sector due to regulatory hurdles. On July 29, 2022, Bittrex global left providing services to Canadian users citing regulatory developments in the country.
As of current law, CTPs are required to register with financial regulators before providing services in Canada. CSA remarked that crypto platforms that violate the rules must face legal action by the country’s financial watchdogs. KuCoin and ByBit are an example of it, paying millions of dollars in fines after June 2022.
Featured image from Pixabay and chart from TradingView.com