- Crypto.com will delist Tether USDT from January 31st, following instructions from the Ontario Securities Commission.
- Canadian regulators have announced a new pre-registration undertaking for crypto platforms willing to operate within the country.
- Crypto assets will remain classified as “high-risk” investments within the country.
Cryptocurrency exchange Crypto.com plans to delist Tether USDT, effective from January 31st. The cryptocurrency exchange will no longer facilitate transactions involving Tether within the country and plans to remove the coin from the list of available trading assets.
The exchange announced to users early this year that customers would make final withdrawals before the effective date.
According to the notice, all trading, deposits, and withdrawals will be halted after the deadline.
“Please take urgent action to review your USDT balance and take any necessary action before the
effective date,” the notice stated. It also added that all remaining USDT balances would be converted to USDC, Circle’s stablecoin.
“Crypto.com has delisted USDT for users in Canada by instructions from the Ontario Securities Commission (OSC) as part of our pre-registration undertaking for a restricted dealer license,” a spokesperson for Crypto.com told Decrypt.
In August 2022, Crypto.com signed a Pre-Registration Undertaking with the Ontario Securities Commission (OSC) in Canada. Under the terms of the agreement, the exchange platform falls under the undertaking that mandates it to comply with Canadian regulations fully.
As part of regulatory requirements, cryptocurrency exchanges operating in the Canadian province of Ontario are prohibited from listing digital assets banned by the OSC, which includes USDT.
Other exchanges under regulatory bodies in Canada, like Coinbase, delisted Tether USDT from available trading assets.
Canada Tightens Rules for Unregulated Crypto Platforms
In the wake of FTX’s collapse, Canadian regulators announced a new regulation that requires crypto trading platforms seeking registration to sign undertakings to comply with investor protections before they are formally under regulatory watch.
The regulation binds crypto platforms operating in the country and those located outside Canada that are accessible to Canadians.
According to a released statement by the Canadian Securities Administrators, the pre-registration undertaking includes a clause stating that Canadian clients’ assets will be held with an appropriate custodian.
The assets will also be kept separate from the company’s primary business. Crypto platforms will also be prohibited from offering margin or leverage for any Canadian client.
If a pre-registration undertaking is not provided to the principal regulator by a deadline to be determined, or the platform has not ceased operations in Canada, “all appropriate regulatory options to bring the platform into compliance with securities law, including enforcement action, (will be considered), the statement added.
The undertaking comes amid a continuous nationwide crackdown effort on unregulated exchanges, although the decision has forced crypto exchanges, including Binance, to withdraw services in certain jurisdictions.
Binance, the largest crypto exchange, ceased activities involving Ontario residents in March 2022, following the Ontario Securities Commission (OSC) undertaking to stop opening new accounts for users in the province.
The decision was reached months after the exchange had announced its decision to quit after refusing to comply with local security registration law.
Since then, the Ontario Securities Commission has brought many lawsuits against offshore crypto platforms, resulting in penalties for non-compliance to its deadline and for operating in the country without registration.
Crypto Assets Remain High-Risk Investments in Canada Despite New Undertakings
Stan Magidson, chair and chief executive of the Alberta Securities Commission, said the CSA had begun deliberating on crypto regulations following the collapse of domestic player QuadrigaCX in 2019. However, “slightly different perspectives” kept them from reaching a consensus.
The CSA statement added that crypto assets and other financial products would remain high-risk despite new pre-registration undertakings.
“These risks could result from, among other things, crypto trading platform non-compliance with registration terms and conditions or undertakings, interconnectedness within the crypto sector, insolvency, hacks, price volatility, and uncertain value propositions for individual assets,” it said.
The CSA has also concluded that stablecoins will be viewed as securities or derivatives, saying that,
“Crypto trading platforms registered or that have entered into a pre-registration undertaking are reminded that they are prohibited from permitting Canadian clients to trade, or obtain exposure to, any crypto asset that is itself a security and a derivative.”
Canadian investors have been urged to exercise caution and seek advice from registered investment advisors before investing in crypto. They also ensure the platform is registered with a provincial or territorial securities regulator.
