Kraken Applauds Canadian Strict But Collaborative Regulatory Approach

Updated: 17 August 2023

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Kraken, one of the largest cryptocurrency exchanges, credits the recently imposed Canadian crypto regulations for its ability to stay operational and invest in the country’s crypto industry. The exchange has acknowledged having benefitted from the clarity provided by the country’s regulatory efforts despite the imposition of stringent rules.

Kraken Thrives in Canadian Crypto Landscape Amid New Regulations

Speaking to Cointelegraph at the Blockchain Futurist Conference, Kraken managing director for Canada Mark Greenberg said, “The Canadian regulators have been collaborative, helpful. […] There’s a clear regulatory pathway. It’s allowed us to invest in the country.”

The crypto rules the Canadian authorities have recently established have driven some exchanges out of the country’s crypto market. Businesses such as OKX quit offering crypto services to the Canadian user base, citing the new regulations and difficulty complying.

Others include Binance, which stopped serving the Canadian market in May due to the new stablecoin regulations imposed a little earlier. The rules, released in February, prohibited crypto asset trading platforms (CTPs), commonly known as crypto exchanges, from allowing Canadian clients to buy or sell stablecoins without consent from the Canadian Securities Administrators (CSA).

4) CSA believes STABLECOIN arrangements may constitute securities and/or derivatives.

This categorization could lead to a major delisting of stables on Canadian exchanges (who are prohibited from allowing 🇨🇦 clients exposure to any crypto asset that is a security/derivative).

— Jacob Robinson (@JacobRobinsonJD) December 12, 2022

Additionally, the CSA stipulated clearly that it “would not expect to provide consent” for other types of stablecoin, such as algorithmic stablecoin. This meant that facilitating the trade of some stablecoins would become difficult while others became illegal altogether.

Fortunately, courtesy of the Kraken’s size and user base, as well as the variety of tokens and services it provides, the company was able to survive these restrictions. The crypto exchange has, however, acknowledged how difficult it has become to comply with the new rules.

“It’s not the easiest thing to meet those requirements,” Greenberg said, “, especially for smaller platforms […] that just weren’t able to put that kind of energy against it.

Despite the difficulties, Kraken has ascertained that it is dedicated to remaining operational and serving the Canadian crypto market and investors. “It took a lot of work for us,” Greenberg added. “We’re lucky that we have a great user base here in Canada, and we were able to make those costs work.”

Ramping Issues As Banks Remain Hostile

While crypto exchanges are committed to providing services to their user bases, the traditional finance industry, on the other hand, is distancing itself from the crypto industry. This has made it difficult for crypto investors to exchange their cryptocurrencies for fiat currencies and vice versa.

According to Greenberg, the five central banks in Canada “have typically been relatively hostile to crypto.”

Kraken has collaborated with Payper, a Canadian payment service, to alleviate the issue by providing instant e-money transfers of up to 3,000 Canadian dollars. Additionally, users can deposit fiat currency to crypto exchanges or receive fiat from them in person at Canada Post.

Other platforms have been seeking ways of solving the issue; for example, Coinbase partnered with Trustly, which will offer open banking services to the exchange’s users in its recent expansion to Canada. This offering allows users to deposit and withdraw funds directly from their bank account to their crypto wallet and vice versa.

Coinbase is launching in Canada today! 🇨🇦

New leadership, new payment rails, new regulatory milestones, and 200 local employees.

Smart countries are embracing this technology (and creating regulatory clarity) to help update the financial system and drive economic growth.…

— Brian Armstrong (@brian_armstrong) August 14, 2023

The exchange also launched an Interac e-Transfer service for all of its users. The service, which is being provided in partnership with local financial services company Peoples Trust Company, enables users to deposit and withdraw money from their accounts. According to Coinbase, this was one of the most requested services from its Canadian user base since its launch.

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