Cryptocurrency exchange Bybit today informed its Canadian users that it would cease operations and no longer be accepting new customers effective May 31, 2023. The industry’s giant seemingly opted to pull out of Canada, rather than comply with securities law or face regulatory scrutiny.
Existing users of the cryptocurrency exchange will be given until July 31 to deposit funds and top up their balances before these services are gradually discontinued. Any remaining holdings will be liquidated after September 30.
Canadian customers who will continue to trade until this date are advised to take necessary steps to wind down their open trades. Failure to do so will result in the automatic liquidation of open positions in margin products and derivatives. The funds obtained from the liquidation will be made available for withdrawal, the exchange said.
The recent move comes as Canada’s financial regulator is rolling out a co-ordinated oversight regime for cryptocurrency activities. Now, all crypto trading platforms seeking registration are obliged to sign undertakings to comply with investor protections.
The new rules will also make it more difficult for retail investors to trade cryptocurrencies using leveraged bets.
The Canadian Securities Administrators (CSA) plans to strengthen its oversight of cryptocurrency exchanges operating in the country. As part of a basket of new registration requirements, crypto applicants will have to agree to tighter rules, including a ban on margin and leverage trading.
Additionally, the proposal prevents crypto providers from accepting payments via credit cards and requires them to keep customer assets segregated from their own operational funds.
These measures also include suggestions that providers should be forced to hold all Canadian clients’ assets “with an appropriate custodian and segregate these assets from the platform’s proprietary business.”
To continue operating while their application is being processed, cryptocurrency platforms must give their primary regulator a pre-registration undertaking. By making these commitments, the crypto exchange acknowledges that its platform is bound by terms and conditions that address investor protection issues.
The move to exit Canada comes a few weeks after Bybit shifted its headquarters from Singapore to Dubai, offering a full suite of products and services under the emirate’s test-adapt-scale virtual assets market model.
Against the backdrop of a crashing market and burned investors, Dubai has recently sealed a landmark rulebook that governs how the Emirate will regulate cryptocurrency activities.
