Canada's New Crypto Rules and Their Impact

Canada's new crypto rules, set for 2026, further restrict decentralized markets. Crypto exchange Gemini has become the latest platform to withdraw from the Canadian market, following in the footsteps of major players like Binance, OKX, dYdX, and Bybit.

Gemini's departure highlights crypto companies' challenges in navigating Canada's increasingly stringent regulatory landscape. The exchange's decision marks a significant shift, as Gemini had previously described Canada as a critical part of its international expansion strategy.

Broader Trend of Exits

Gemini's move follows a broader trend of crypto platforms exiting Canada due to rising compliance costs and complex regulatory hurdles.

Canadian authorities have been tightening their grip on the crypto market since February 2023, when the Canadian Securities Administrators (CSA) required all crypto exchanges operating in the country to sign legally binding pre-registration agreements.

These agreements complemented existing restrictions, such as the prohibition of margin trading for Canadian users and limitations on offering stablecoins, which many exchanges found challenging to adhere to.

Though Gemini initially complied with the new regulations by submitting a pre-registration undertaking in April 2023, the evolving regulatory climate has proven too burdensome.

The exchange's exit echoes that of Binance and OKX, which similarly cited the high cost and complexity of complying with Canada's increasingly restrictive rules.

Stricter Regulations Ahead

Looking ahead, the regulatory environment for crypto in Canada is set to become even more stringent. In April 2024, the Canadian government introduced the Crypto-Asset Reporting Framework, which will come into effect in 2026.

This framework will require crypto service providers to report detailed transaction data annually, including sensitive client information such as residential addresses and taxpayer identification numbers.

"The evolving regulatory climate has proven too burdensome."

Gemini's Notice to Canadian Users

Gemini formally notified its Canadian users on September 30, urging them to withdraw their assets by December 31, 2024.

The Winklevoss-founded exchange has given customers a 90-day window to move their cryptocurrency holdings and fiat balances before all Canadian accounts are closed.

As Gemini bows out, Canadian users will have fewer options to access decentralized markets, while global exchanges like Coinbase, Kraken, and Crypto.com will continue to operate within the country's borders.