Paxos Announces Exit From Canada Citing Regulatory Ambiguity

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Key takeaways:

  • The Canadian market will no longer be served by the fintech startup Paxos.
  • Paxos promised clients their money would “remain safely” in their accounts but urged them to remove all remaining sums as soon as possible.

Fintech company Paxos has decided to leave the Canadian market. Paxos provides blockchain-based solutions for the worldwide financial sector. 

Customers can only withdraw money from their Paxos accounts as of June 2 after the firm issued a statement advising them of the change. This action is being taken as part of Paxos’ efforts to evaluate whether or not it is ready to reenter the Canadian market in collaboration with the Ontario Securities Commission (OSC).

In accordance with Paxos’ terms and conditions, it was also announced that customers’ monies would be kept secure in their accounts and shown on their account balances. However, the business has asked consumers to remove their account balances at their “earliest convenience.” Accounts that have no money in them will be immediately canceled on May 9 for customers.

On the other side, clients who keep money in their Paxos account beyond June 2 will continue to be allowed to access and withdraw it. They won’t have complete access to the Paxos platform, though, so they won’t be able to start new deals. Customers are encouraged by Paxos to wire their fiat balances to bank accounts connected to their personal “itBit account” or move whatever digital assets they have in their accounts to external wallets.

The move by Paxos to leave the Canadian market occurs as Canada has recently tightened its laws on cryptocurrency platforms. The Canadian Securities Administrators (CSA) published a notice on February 22 that requires cryptocurrency exchanges to sign new, legally binding contracts while they wait to be registered with the regulatory body. The amended undertaking contains a provision that prohibits purchasing or depositing Value Referenced Crypto Assets, or stablecoins, through crypto contracts without the CSA’s prior written consent.

Paxos is not the only business to have recently left the Canadian market. The Canadian operations of the crypto derivatives exchange dYdX will be shut down, with the onboarding of new members beginning on April 7.

It has been conjectured that a shift in the regulatory landscape was the main factor in dYdX’s decision to stop providing services to Canadians. All current Canadian customers will be switched to “close-only mode,” allowing them only to withdraw money, starting April 14. 

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Deep Dalal
Deep Dalal

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