Gemini to Shut Down All Customer Accounts in Canada

The cryptocurrency exchange Gemini, co-founded by the Winklevoss twins, has announced plans to close all customer accounts in Canada by the end of 2024. In an email sent to Canadian users on September 30, Gemini informed them that all accounts would be terminated on December 31, 2024, and users will have 90 days to withdraw their assets from the platform.

Official Announcement

In its communication, Gemini stated:

“Effective December 31, 2024, Gemini will close all customer accounts in Canada with limited exceptions. As a result, we will be closing your Gemini account.”

This announcement signifies a significant withdrawal from the Canadian market, influenced by recent regulatory changes in the country.

Gemini’s decision comes in response to new regulations introduced by Canadian financial authorities governing cryptocurrency exchanges and trading platforms. On February 22, 2024, the Canadian Securities Administrators (CSA) published a notice mandating that all crypto asset trading platforms sign a legally binding pre-registration undertaking (PRU) to continue operating in Canada. This includes restrictions that prevent exchanges from allowing Canadian clients to purchase or deposit stablecoins without prior approval from the CSA.

In light of recent insolvencies involving various crypto trading platforms, such as Voyager Digital and FTX, the CSA introduced enhanced investor protection provisions in the standard PRU, aiming to bolster accountability within the crypto sector.

Industry Reactions to the New Rules

The introduction of these regulations elicited varied responses from major international crypto exchanges.

Gemini was proactive in adhering to the new requirements, submitting its pre-registration on April 13. A spokesperson for the exchange emphasized that Canada is “one of the most important and developed markets in the Americas” and has played an “essential role in Gemini’s international expansion.”

Following the announcement of the new regulations, Kraken and Binance also reported that they had filed the necessary pre-registrations to continue operating in Canada. However, Binance later reversed its decision, announcing on May 12 that it would exit the Canadian market. Other exchanges, including OKX, dYdX, Paxos, and Bybit, followed suit, signaling the significant impact of the regulatory environment on crypto operations in Canada.

Gemini’s closure of Canadian accounts raises important questions about the future of cryptocurrency exchanges in the country. The strict regulatory framework may deter other international players from entering or remaining in the market, limiting options for Canadian consumers.

While the CSA’s intentions to protect investors are commendable, the stringent regulations could stifle innovation and competition within the crypto sector. By placing substantial restrictions on stablecoins and requiring extensive compliance measures, the regulatory landscape may discourage exchanges from providing services to Canadian users.

Gemini’s impending closure of all customer accounts in Canada marks a significant shift in the Canadian cryptocurrency market. As regulatory pressures mount, it remains to be seen how other exchanges will adapt and what impact these changes will have on the future of digital asset trading in Canada.

The evolving regulatory landscape will undoubtedly shape the decisions of both domestic and international exchanges, potentially redefining the opportunities available for Canadian consumers in the cryptocurrency space.

As the cryptocurrency landscape continues to evolve, stakeholders will need to navigate the challenges and opportunities presented by these new regulations, ensuring a balance between consumer protection and the promotion of innovation within the industry.

Featured image credit: DALL-E by ChatGPT

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