OKX shuttering Canadian operations by mid 2023

Cryptocurrency exchange OKX intends to shutter operations in Canada by mid-2023, according to an email sent to users in the country.

The exchange said withdrawals will remain open until June 22 and users must transfer their crypto and fiat to other crypto wallets or linked banked accounts. OKX said in the email:

” You will be able to withdraw dollars to your linked bank account and cryptocurrency to your self-custody wallet or your cryptocurrency account on another exchange.”

OKX is registered in Seychelles and headquartered in Malta and currently ranks as the 8th largest crypto exchange by market cap, according to Coinmarketcap data.

Regulatory issues

OKX said it made a move due to “new regulations” in Canada. The exchange did not specify which rules lead to the decision or what stage the regulatory process is at.

However, it added in the email that closure is temporary and it is working with regulators to resolve the issues stemming from the new rules.

OKX did not respond to requests for further clarification from CryptoSlate at the time of writing.

New rules

All crypto exchanges are currently required to register with Canadian regulators before onboarding users in the country and failure to do so has led to millions in fines for crypto exchanges — namely Bybit and KuCoin, which were fined by Canadian regulators in 2022.

Most recently, the Canadian Securities Administrators (CSA) issued a notice requiring all crypto exchanges awaiting registration to sign legally binding “undertakings” to enhance investor protection.

These undertakings include a prohibition on allowing users to purchase and transfer stablecoins without prior regulatory consent. According to the CSA notice:

“If a CTP is unable or unwilling to provide an enhanced pre-registration undertaking, the CSA expects it will take appropriate action to off-board existing Canadian users and impose restrictions to prevent Canadian users from accessing its products or services.”

As of Jan. 18, none of the top 10 cryptocurrency exchanges by marketcap are fully authorized to operate in Canada.

Meanwhile, only KuCoin and Poloniex are banned from operating in the country.