Gemini to Close All Canadian Accounts Amid Regulatory Concerns

Highlights:

• Gemini will shut down all customer accounts in Canada by December 31, 2024.
• Canadian users must withdraw their assets within 90 days of the announcement.
• Increased regulations have led multiple exchanges to exit the Canadian market.

The Winklevoss-founded crypto exchange Gemini has decided to shut down all customer accounts in Canada by December 31, 2024. In a private mail sent to its Canadian customers on September 30, Gemini told users that they have 90 days to withdraw assets from their accounts.

The crypto exchange had been expanding internationally, making this news shocking to the community and the crypto space. Confused users are sharing screenshots of the email on social media, questioning why the exchange decided to close.

The email read:

“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 decision marks a significant reversal for the platform, which previously considered Canada a key market for international growth. The Gemini team has requested that Canadian customers transfer their crypto assets to an external wallet address. Additionally, users with fiat in their accounts can withdraw those funds to their linked bank accounts.

Cryptocurrency exchange Gemini said in an email to Canadian users on September 30 that it would close all Canadian accounts (with only a few exceptions) by December 31, and users would have 90 days to withdraw their assets from the platform. OKX, dYdX, Paxos, Bybit and Binance…

— Wu Blockchain (@WuBlockchain) October 1, 2024

Gemini and Leading Exchanges Exit Canada Amid Regulatory Challenges

Following the collapse of several significant crypto institutions in 2022, Canada chose to establish regulations to classify crypto assets legally. On February 22, the Canadian Securities Administrators (CSA) issued a notice mandating that all crypto asset trading platforms sign a legally binding pre-registration undertaking (PRU) to remain operational in the country.

Another CSA requirement prohibits platforms from “allowing clients to purchase or deposit value-referenced crypto assets (commonly known as stablecoins).” However, some Canadian provinces have their own regulations regarding crypto assets, meaning Canadians need to be aware of both provincial and federal guidelines.

Following this Staff Notice, many prominent crypto exchanges, including Binance, dYdX, and OKX, chose to exit the market, while Gemini opted to remain. In April 2023, Gemini submitted their pre-registration in an effort to comply with the new requirements. As the year progressed, it became evident that the challenges were overwhelming, leading them to ultimately decide to exit the market as well.

Kraken and Binance both stated that they had submitted the required pre-registrations to continue operating in the country after the rules were announced. However, Binance later reassessed its position and announced its departure on May 12. Some exchanges, including Bybit and KuCoin, faced fines from the Ontario Securities Commission for operating without the necessary registration.

The closure underscores the increasing regulatory challenges that crypto exchanges are facing worldwide. As regulatory environments continue to change, exchanges must navigate complex requirements to remain operational across various jurisdictions.

Canada Tightens Crypto Reporting Measures

On April 17, 2024, the Canadian government announced a new Crypto-Asset Reporting Framework. This framework, effective in 2026, mandates annual transaction data reporting by all cryptocurrency service providers, including exchanges, brokers, and ATM operators. Additionally, the framework mandates that service providers disclose client-specific information, including names, residential addresses, and taxpayer identification numbers.