dYdX Slides 5%+ as Its DEX Announces Departure From Canada
The decentralized cryptocurrency exchange dYdX announced on Friday, April 7th, that it is closing its Canadian operations. The platform has already stopped onboarding clients from the country and all existing users from Canada will be moved into close-only mode on April 14th. The associated token, DYDX, entered into a quick decline following the news and is down more than 5% at the time of writing.
dYdX To Leave Canada, Hopes Regulatory Climate Will Change
On Friday, April 7th, the decentralized cryptocurrency exchange dYdX announced its departure from Canada. According to its website, they have already stopped onboarding Canadian users and all existing such users will enter close-only mode next Friday. The exchange offered no exact reason for the departure.
However, the notification on the webpage comments that dYdX is hopeful that “the regulatory climate in Canada will change over time” making it likely that the recently introduced changes to the requirements for cryptocurrency platforms are the probable cause. The decentralized exchange also expressed its hopes that it will be able to return to the Canadian market at some point in the future.
The exchange’s associated token—also called DYDX—entered into a decline following the news but seemingly stabilized around $2.45 by the time of writing. dYdX isn’t the first cryptocurrency platform to reconsider its future in Canada following the change in requirements.
Previous weeks saw multiple rumors circulating the internet on whether Binance and Coinbase would remain in the US’ northern neighbor. So far, neither has shown signs of departing and Kraken, another major exchange, recently revealed it is actively taking the steps necessary to remain in Canada.
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Are North American Regulators Trying to Ban Digital Assets?
It has been more than six months since Congressman Tom Emmer likened the SEC to a “shakedown authority” with regard to cryptocurrencies, and the situation between regulators and the industry has only become tenser since then. Perhaps the biggest sign of the watchdogs’ intention came when Coinbase, widely considered one of the most compliant digital asset companies, received a Wells notice warning it may have violated securities laws.
As a consequence of the deteriorating situation, warnings that the current regulatory climate could catastrophically affect both digital assets and innovation more broadly in the US started emerging. While the industry is yet to see a mass exodus, there have already been several major departures by cryptocurrency exchanges from the United States with Nexo leaving late last year, and Paxful, a P2P Bitcoin exchange, announcing its own exit earlier this week.
Similarly, the recent toughening of the regulatory climate in Canada became a cause for concern for digital asset companies. with today’s announcement made by dYdX coming as proof there is a reason for concern. Furthermore, previous experience in other markets may offer a glimpse of things to come with, for example, Binance returning to the Japanese market only recently, after the nation signaled it may be warming up to cryptocurrencies.
Do you think more cryptocurrency companies will leave Canada over the coming months due to regulatory changes? Let us know in the comments below.