Paxos set to end support for Canadian customers next month

Quick Take

  • Paxos is following dYdX in exiting the Canadian market, according to an email obtained by The Block.

Paxos, a crypto financial services provider, is exiting the Canadian market. 

"Paxos has determined it will no longer support customers in Canada moving forward," the company told Canadian customers in an email today that was obtained by The Block. “Given your Paxos account remains unfunded, your account will be disabled on May 9th 2023.”

The move is due to regulatory reasons, a source familiar with the matter told The Block.  

Last week, decentralized crypto derivatives exchange protocol dYdX said it stopped onboarding new users based in Canada.

The dYdX and Paxos developments come after the Canadian Securities Administrators published new regulations in February, warning crypto exchanges and trading platforms to comply with "enhanced investor protection commitments."

“Paxos is focused on serving enterprise clients and their growth into the digital assets ecosystem," a Paxos spokesperson said.  "While our platform will no longer support Canadian customers in the immediate term, we will reassess our presence in this region in partnership with our clients’ evolving needs.”

Exiting Canada is the latest blow for Paxos. Last month, the company's dreams of a national banking charter died as its application for a national banking charter expired at the end of March.

Paxos is also facing pressure from state and federal regulators in the U.S. The Securities and Exchange Commission sent Paxos a letter in February informing the company that the regulator was investigating its joint stablecoin project with Binance, BUSD. The New York Department of Financial Services also ordered Paxos to stop issuing BUSD. Paxos says it has stopped minting the token.

Crypto exchange Gemini, meanwhile, said Wednesday that it filed a pre-registration undertaking to the Ontario Securities Commission in move it said showed its "continued commitment to Ontario and the broader Canadian market."

The filing is a "key step in our application to register as a restricted dealer with the OSC," the company said. "Canada has also been at the forefront of the global crypto fund management space, with publicly traded crypto ETFs being approved and in market since 2021," the company added.

(Updates with statement from Gemini about Canadian market.)

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