The Bybit exit from Canada the increasingly stringent crypto regulations enacted by Canada’s securities regulator.
Bybit recently announced its exit from Canada due to recent regulatory developments in the North American nation. The Dubai-based crypto exchange said it is suspending its offerings to Canadian residents and exiting the country’s market today.
Bybit’s departure from Canada follows the exit of other exchanges from the country, including leading player Binance. However, other popular crypto-focused firms like Kraken, Coinbase (NASDAQ: COIN), and Gemini remain committed to Canada.
In a blog post released Tuesday, Bybit said:
“It has always been Bybit’s primary objective to operate our business in compliance with all relevant rules and regulations in Canada. In light of recent regulatory development, Bybit has made the difficult but necessary decision to pause the availability of our products and services.”
The Dubai-headquartered exchange pointed out that it would stop accepting new account applications from new users on May 31st. Additionally, Bybit explained that its existing account holders would no longer be able to initiate new deposits or contracts from July 31st. Existing customers have until the end of July to increase current positions before Bybit phases out services. However, the company noted that customers can still withdraw or reduce their positions after the closing date. Furthermore, the crypto exchange said it would liquidate other positions after September 30th. According to Bybit:
“Canadian customers should take steps by September 30th, 2023, to wind down and manage their positions. Failing which, open positions in any margin products and derivative contracts…will be liquidated, and the liquidated funds will be available for withdrawal.”
Bybit Did Not Expound on Canada Exit, But Has Endured Regulatory Enforcement in the Past Year
Bybit did not explain its exit from Canada besides “recent regulatory development”. The exchange and other crypto firms have endured a stringent regulatory environment in the nation since last year. In June 2022, the Ontario Securities Commission (OSC) imposed enforcement actions against Bybit and KuCoin. At the time, the OSC claimed both crypto exchanges violated securities laws and operated unregistered digital asset trading platforms. ByBit and KuCoin were fined $2.4 million and over $1.6 million, respectively, for failing to comply with Ontario securities laws. However, the OSC noted that only Bybit, which paid the regulator an additional $7,724 as part of its investigative costs, responded to the enforcement action. Furthermore, the Canadian securities regulator commended the Dubai exchange for maintaining an open dialogue and being generally cooperative at the time.
In April, Bybit announced plans to introduce compulsory Know Your Customer (KYC) requirements for all users beginning in early May. The exchange cited the KYC agenda as necessary to provide a safer and more sustainable trading experience amid growing crypto adoption. Last month, Bybit also noted that KYC-verified users could withdraw a 20,000 USDT limit per day on its platform.
However, Bybit’s KYC initiative came several weeks after Canada revealed new crypto company guidance in February. To continue operations, the country mandated crypto trading platforms to secure Canadian Securities Administrators (CSA) approval.
This guidance proved unpopular in the Canadian crypto space and prompted Binance to pull out earlier this month. While Bybit has announced an official exit from Canada, the company is exploring an expansion into Kazakhstan.
Tolu is a cryptocurrency and blockchain enthusiast based in Lagos. He likes to demystify crypto stories to the bare basics so that anyone anywhere can understand without too much background knowledge.
When he’s not neck-deep in crypto stories, Tolu enjoys music, loves to sing and is an avid movie lover.
