Coinbase, Kraken plan to continue operating in Canada as regulatory rules change

Crypto exchanges Coinbase and Kraken have stated that they plan to continue operating in Canada.

Coinbase says it will serve Canadians

Coinbase said in a March 30 blog post that Coinbase Canada has signed an enhanced pre-registration undertaking with Canadian securities regulators.

The company added that its Canadian presence is part of its international expansion efforts. Coinbase said it has created a “tech hub” in Canada with more than 200 engineers and said that its global team will visit Canada on a regular basis.

Coinbase also said that it has hired Lucas Matheson, a former Senior Director of Operations at Shopify, to direct Coinbase’s Canadian operations from Ottawa.

The company’s announcement implied that its interactions with Canadian regulators were favorable. Its various statements suggest that the country’s regulatory framework provides clarity, permits innovation, and protects consumers.

By contrast, Coinbase is currently locked in a dispute with U.S. Securities regulators, which have sent the firm a Wells notice in advance of possible legal action.

Kraken to also operate in Canada

Kraken also said it has filed a pre-registration undertaking with Canada’s Ontario Securities Commission (OSC) and aims to become a registered Restricted Dealer in the country.

COO David Ripley called Canada a region that is “critical to [Kraken’s] mission.” The company emphasized its local presence by stating that it has served Canadian users for over ten years and has more than 250 employees in the country.

Kraken also highlighted the rate of crypto adoption in Canada in a separate blog post. There, it cited statistics from the OSC itself showing that 13% of Canadians currently own cryptocurrency and that 31% of Canadians plan to purchase crypto in one year.

The company said that, despite its commitment, it will make “certain changes” to the services that it offers in Canada in order to remain in line with the new rules.

Canadian rules affect multiple exchanges

Kraken’s change in policy is due to rules that are currently being introduced by Canadian securities regulators. These rules required crypto exchanges to pre-register within 30 days of Feb. 22, in order to continue operating in the country.

Under the new rules, exchanges must segregate crypto assets held by Canadian users and refrain from offering certain services. These requirements came after the collapses of U.S.-based crypto platforms, and the failures of FTX, Celsius, BlockFi, Genesis, and Voyager Digital are explicitly named in a government statement.

Kraken and Coinbase are among the first exchanges to officially declare their intent to remain in Canada. According to the Canadian Securities Administrators, just one other exchange — Crypto.com  — has filed a pre-registration undertaking.

Blockchain.com has stated on its website that it will suspend Canadian custodial and exchange services. OKX has also told users that it will discontinue Canadian services.