All cryptocurrency exchanges are required to sign this pledge if they wish to operate in Canada following a regulatory change in February.

On April 12, the Gemini cryptocurrency exchange advertisement that it had filed a pre-registration undertaking with the Ontario Securities Commission (OSC), which oversees financial markets in Canada’s most populous province. The pledge is a prerequisite for becoming a restricted reseller in Canada and is required for all cryptocurrency exchanges wishing to do business in the country. Cynthia Del Pozo Garcia, Director of Strategy and Development at Gemini, wrote:

“As one of the largest and most developed markets in the Americas, Canada has played a vital role in Gemini’s international expansion.”

According to Del Pozo Garcia, Gemini holds “numerous licenses around the world”, such as government funds issuer licenses, an e-money license from the UK’s Financial Conduct Authority, and an e-money license from the Central Bank of Ireland. “As part of our licensing, Gemini is required to submit to annual audits of its financial statements and is subject to banking reviews conducted by the New York Department of Financial Services,” the director said.

On February 22, the Canadian Securities Administrators (CSA) issued a notice requiring all crypto asset trading platforms sign a legally binding pre-registration commitment in order to continue to operate in the country. Among many other restrictions, exchanges will be prohibited from allowing Canadian customers to purchase or deposit stablecoins without prior CSA approval.

“In light of recent insolvencies involving a number of PFTs, including Voyager Digital, Celsius Network, FTX Group of Companies, BlockFi and Genesis Global (collectively, the recent PFT insolvency events), we are introducing important news investor protection provisions in the standard form of PRU”.

Since the new regulations took effect, cryptocurrency exchange OKX has announced that it will cease operations in Canada in June 2023. For its part, financial technology company Paxos has stated that it would withdraw from Canada, alleging regulatory uncertainty. Since then, Binance and Kraken have declared who have present the pre-registration commitment necessary to continue providing services in the country.