Bybit Crypto Firm Exits Canada

Updated: 31 May 2023

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Bybit, the crypto exchange platform, has confirmed to its Canadian clients that it would suspend its operations. Further, it will no longer accept new customers effective May 31.

In an official statement, Bybit noted:

It has always been Bybit’s primary objective to operate our business in compliance with all relevant rules and regulations in Canada. In light of recent regulatory development, Bybit has made the difficult but necessary decision to pause the availability of our products and services.

However, existing users of the Bybit platform will be given until July 31 to deposit funds and top up their balances before these services are gradually halted. Any remaining holdings will be liquidated after September 30.

Nonetheless, Canadian customers who will continue to trade are advised to take the necessary steps to wind down their open trades. Failure to do so will result in the automatic liquidation of open positions in margin products and derivatives. The exchange stated that the funds obtained from the liquidation would be made available for withdrawal.

The Canadian Financial Regulator

The recent developments come as Canada’s financial regulator is rolling out a coordinated oversight regime for crypto activities. All crypto trading companies seeking registration must sign undertakings to comply with investor protections. Notably, the new rules will make it difficult for retail investors to trade cryptocurrencies using leveraged bets.

Further, the Canadian Securities Administrators (CSA) plan to strengthen its oversight of crypto firms operating in the country. Some of the new requirements that crypto applicants must comply with include a margin and leverage trading ban. Additionally, the proposal prevents crypto providers from accepting payments via credit cards. However, they must keep customer assets segregated from their operational funds.

Bybit Expansion

The move to exit Canada comes a few weeks after Bybit shifted its headquarters from Singapore to Dubai. Bybit offers a full suite of products and services under the emirate’s test-adapt-scale virtual assets market model.

On May 29, the company said it had received “in-principle” approval from regulators in Kazakhstan. This move followed Bybit’s introduction of cryptocurrency lending services.

However, besides Bybit, other crypto platforms have exited Canada, citing unfavorable regulatory rules. In early May, Binance announced the halting of services for Canadian customers noting that the regulatory landscape meant operating in the country was no longer “tenable” for the exchange.

At that time, Binance said:

Unfortunately, new guidance related to stablecoins and investor limits provided to crypto exchanges makes the Canadian market no longer tenable for Binance. We put off this decision as long as we could explore other reasonable avenues to protect our Canadian users. Still, it has become apparent that there are none.

Nonetheless, OKX announced it would temporarily cease operations in the Canadian market in March. A month later, in April, dYdX and Paxos also revealed that they would no longer offer services in Canada.

Conversely, some crypto platforms, including Coinbase and Kraken, have reaffirmed their intent to keep operating in Canada. The firms have taken the compliance route and have welcomed more regulation in the crypto space, even if it is restrictive.

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