After several months of uncertainty, Paxos, a cryptocurrency exchange platform, has announced that it will cease operations in Canada due to regulatory requirements set by the Ontario Securities Commission (OSC).
The decision comes as a surprise to many users of the platform who were hoping for a resolution that would enable them to continue trading in cryptocurrencies.
What happens to Paxos user funds?
The announcement by Paxos has raised several questions among its Canadian users regarding the fate of their funds. However, the platform has reassured users that their funds remain safe and protected by Paxos’ Terms and Conditions.
Users are advised to withdraw all balances from their account at their earliest convenience, as beginning June 2nd, they will no longer be able to transact from their Paxos account, aside from withdrawing their funds.
Paxos has provided a clear timeline of events for its Canadian users. If the Paxos account currently holds no funds, the account will be automatically closed on May 9th.
If users maintain a balance in their Paxos account, they are asked to withdraw all balances from their account at their earliest convenience. Beginning June 2nd, their account will be disabled, and they will not have full access to Paxos’ platform to initiate new trades.
Users will be able to wire their fiat balance to the bank account linked to their itBit account under their name. However, if users have moved to Canada, they are required to withdraw all balances from their accounts at their earliest convenience.
Beginning June 2nd, their account will be disabled, and they will not have full access to Paxos’ platform to initiate new trades. Access to their account and any funds left on the platform will require additional processes.
According to a statement released by Paxos, the platform decided to cease operations in Canada after assessing its readiness to comply with regulatory requirements set by the OSC.
This decision follows a similar move by OKX, which informed Canadian users via email that the firm “will no longer provide services or allow users to open new accounts in Canada starting on Mar. 24, 2023, 12:00 AM EST,” citing “new regulations.”
Previously, Bittrex Global also off-boarded Canadian users in July 2022.
The regulatory requirements set by the OSC
On Feb. 22, the Canadian Securities Administrators (CSA) published a notice requiring crypto exchanges to sign new, legally binding undertakings while they await registration with the regulatory.
Among many items, the new undertaking prohibits “buying or depositing Value Referenced Crypto Assets (commonly referred to as stablecoins) through crypto contracts without the prior written consent of the CSA,” although it appears the stablecoin USD Coin (USDC) has not been affected by the ruling.
Paxos will continue to assess its readiness to re-enter the Canadian market in cooperation with the OSC at a future date. The platform’s decision to cease operations in Canada has left many of its users disappointed, and some are questioning the wisdom of the OSC’s regulatory requirements. The OSC has yet to respond to these concerns.
