Gemini Exchange Shuts Down Canadian Operations, Exiting the Market by End of 2024

The Winklevoss twins’ cryptocurrency exchange, Gemini, announced that it will be closing down its operations across Canada by the end of 2024. The significant reason for this shutdown is because of the stricter proposed regulations by Canadian authorities that have complicated crypto exchanges’ mode of running within the country.

On 30th September, Gemini Exchange sent an email to Canadian users, asking them to withdraw their assets within 90 days. The company will stop its services from providing services to its customers in Canada as the year reaches its end because most of the accounts will be closed down by 31st December 2024. The nature of regulations in Canada has become tough for cryptocurrency companies to meet. According to the CSA it set strict requirements that are proving to be hard for cryptocurrency sites to follow.

Stricter Regulations in Canada

In February 2023, the CSA implemented additional guidelines relating to the pre-registration declaration requirement, or PRU, for cryptocurrency exchanges that will be operating in Canada. This is something to be completed by any exchange seeking to continue offering services within the country. Additionally, exchanges must obtain approval from the CSA prior to offering stablecoins to customers in Canada.

Several large crypto exchanges would leave the Canadian market because of the strict rules. Gemini Exchange agreed to the new terms and pre-registered in April 2023, but it ultimately decided to leave the market altogether. The company will no longer provide services for Canadian users at the end of 2024.

Gemini Exchange and Other Platforms Exit Canada

This move by Gemini Exchange is part of a larger trend, where virtual currency exchanges have pulled out of the Canadian marketplace due to the increasing difficulties in maintaining compliance. Many of the decentralized platforms that filed their pre-registration forms would later pull out of the market after going through the strict regulatory demands. In May 2023, for instance, Binance, one of the largest cryptocurrency exchanges in the world, announced its retreat from the Canadian market after earlier signals that it was ready and willing to comply with local regulations.

Other key exchanges, like dYdX and Bybit, have also closed their offerings in the country due to increased difficulty in remaining compliant with regulatory requirements in the country. This also extends an increased scrutiny by the CSA in the wake of the collapse of major crypto firms FTX and Celsius Network. Due to this, it has placed stricter rules on crypto exchanges, which include the limitation of stablecoins. These measures serve to protect Canadian investors from financial instability and minimize the risk of more failures related to cryptocurrencies.

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This has pushed many digital asset exchanges like Gemini exchange to shifting operations from Canada to more friendly jurisdictions. It increases the regulatory burden, leading to fewer crypto platforms for users in Canada and resulting in a tougher environment for users to access digital assets within the country.

Ohio Pushes for Cryptocurrency in Tax Payments

Where Canada is making its cryptocurrency laws tighter, Ohio, a U.S. State has moved opposite, embracing digital currencies. Ohio State Senator Niraj Antani on September 30, 2024, introduced legislation allowing cryptocurrency for tax and fee payments. The bill, if passed, would make it mandate upon the state to look at cryptocurrency as a mode of paying state and local taxes along with other various fees.

Under the new law, state institutions and pension funds also would be allowed to invest in cryptocurrency-a huge step toward wider crypto adoption in Ohio. Which cryptocurrencies are allowed for use in tax transactions would be decided by the Ohio tax commissioner on a yearly basis. Notably, CBDCs are exempted from the definition of cryptocurrency to ensure tax transactions will be allowed only with decentralized digital assets.

Ohio’s History of Cryptocurrency

This is not Ohio’s first try to integrate cryptocurrency into its financial system. In 2018, Ohio started an effort that allowed crypto to be paid as taxes, but the move was later shut down. Now, however, this new bill introduced has Ohio once again moving toward incorporating digital currencies into their regulations.

Apart from the tax-paying initiative, the bill offers protection to Ohio’s crypto mining industry and prohibits CBDCs from being used in monetary regulations of the state. These proposals would make the environment more friendly for the cryptocurrency industry in Ohio and put it at the forefront in the U.S. with respect to innovation in digital assets.

Conclusion

The news makes the Gemini exchange things, leaving Canada another sign of how the path is getting rockier for digital currency exchanges. Until now, the more stringent control of the CSA has pushed most major platforms out of business and limited the opportunities for Canadians. The action by Ohio represents yet another step towards acceptance of cryptocurrency on the state level before state regulators are pushing for more states to embrace the use of digital assets in tax and fee payments.

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