dYdX to Exit Canadian Market Amid Regulatory Restrictions
Cryptocurrency derivatives exchange, dYdX, is withdrawing its services from Canada due to increased regulatory restrictions. The exchange will halt new user onboarding on April 7 and move existing users to "close-only mode" on April 14.
Cryptocurrency derivatives exchange dYdX has announced that it will be exiting the Canadian market over the next seven days. In an April 7 blog post, the company stated that it will be "winding down services" in Canada, beginning with the halting of new user onboarding in the country. On April 14, the exchange will move all existing Canadian users to "close-only mode," allowing them to only withdraw funds.
According to dYdX, the decision was made due to increased regulatory restrictions in Canada. The Canadian Securities Administrators recently announced additional restrictions for crypto exchanges' registration requirements in the country. The new rules require platforms to prohibit Canadian clients from entering into crypto contracts to buy and sell any crypto asset that is a security and/or a derivative.
dYdX stated in its blog post that it is committed to transparency and democratizing access to financial opportunity. The exchange expressed hope that the regulatory climate in Canada will eventually change, allowing it to resume its services in the country.
This move by dYdX follows criticisms the exchange received in September 2022 when it offered a $25 deposit bonus for confirming someone's identity using a live webcam image. Many dYdX users and individuals in the crypto space raised privacy concerns, and the exchange ended the program due to "overwhelming demand."
dYdX is a decentralized exchange that specializes in cryptocurrency derivatives trading. It is among the many cryptocurrency exchanges that have faced increased regulatory scrutiny in recent years, particularly regarding investor protection and anti-money laundering measures.
Although dYdX's exit from the Canadian market may be a setback for the company, it is reflective of the challenges that many cryptocurrency exchanges face in navigating regulatory environments around the world. As the crypto space continues to evolve and mature, it is likely that regulatory authorities will continue to monitor and regulate the industry to ensure investor protection and mitigate risks associated with the emerging asset class.