Paxos set to withdraw from Canada amid regulatory uncertainty

Paxos assured its customers that their funds would “remain safely” in their accounts, but advised users to withdraw all balances from their accounts at their earliest convenience.

Paxos, a fintech company that offers blockchain-based solutions for the global financial industry, has announced its decision to withdraw from the Canadian Market. 

The company released a statement on its website informing customers that they will no longer be able to transact from their Paxos accounts starting from June 2nd, except for withdrawing their funds. The move comes as Paxos continues to assess “its readiness to re-enter the Canadian market in cooperation with the Ontario Securities Commission (OSC) at a future date.”

The announcement also stated that customers’ funds would “remain safely” in their accounts and will be reflected on their account balance, protected by Paxos’ terms and conditions. However, the company has urged customers to withdraw all balances from their accounts at their “earliest convenience.”  Customers who don’t have any funds in their accounts will have their accounts automatically closed on May 9.

On the other hand, customers who maintain a balance in their Paxos account will still be able to access and withdraw their funds after June 2. However, they will not have full access to Paxos’ platform to initiate new trades. Paxos has advised customers to wire their fiat balances to bank accounts linked to their “itBit account” that is under their name, or transfer digital assets held in their accounts to external wallets.

Related: New Canadian rules for crypto trading platforms leave little room for stablecoins

Paxos’ decision to exit the Canadian market comes at a time when Canada has been tightening its regulations on cryptocurrency platforms in recent months. On February 22, the Canadian Securities Administrators (CSA) released a notice that mandates crypto exchanges to enter into new legally binding agreements as they wait for registration with the regulatory body. The updated undertaking includes a clause that forbids buying or depositing Value Referenced Crypto Assets, or stablecoins, via crypto contracts without written authorization from the CSA.

Paxos is not the only company to exit the Canadian market in recent months. On March 20, cryptocurrency exchange OKX informed Canadian users via email that the firm “will no longer provide services or allow users to open new accounts in Canada starting on Mar. 24, 2023, 12:00 AM EST,” citing “new regulations.” 

On April 7, cryptocurrency derivatives exchange dYdX announced plans to end services in Canada, starting with halting the onboarding of new users located in the country. On April 14, the exchange will move all existing Canadian users to “close-only mode,” allowing them to only withdraw funds. 

The recent exits depicts a growing trend of companies exiting Canada due to regulatory concerns.