Crypto.com halts USDT trading, deposits and withdrawals

Crypto.com has told its Canadian customers that it plans to delist Tether’s stablecoin (USDT) trading, transactions, deposits and withdrawals by the end of this month.

Tether

While Tether’s ousting might seem significant, the move doesn’t affect  Crypto.com’s global entities. However, Canadian users need to act by the deadline, either to withdraw or convert their USDT assets. Otherwise, all remaining USDT holdings will be automatically converted into the Circle-issued USD Coin (USDC).

“You may incur a retrieval fee if deposits of USDT are made from external wallets after this suspension period, and fund retrieval may not be possible in some cases,” the company said in an email sent to customers.

The write-off of the world’s largest and most liquid stablecoin comes as the Ontario Securities Commission (OSC) has banned crypto exchanges operating in the region from touching Tether (USDT). The decision dates back to 2021 when the stablecoin was deeply linked to alleged market manipulation, and it was the only prohibited digital asset in the country.

Crypto.com’s late compliance comes as part of their pre-registration undertaking for a restricted dealer license. To continue operating while their application is being processed, cryptocurrency platforms must give their primary regulator a pre-registration undertaking. By making these commitments, Crypto.com acknowledges that its platform is bound by terms and conditions that address investor protection issues.

If a cryptocurrency trading platform is unable to file an undertaking or does not adhere to its requirements, CSA members may seek legal action.

The new registration comes amid a nation-wide crackdown on unregulated exchanges. Binance, the world’s largest cryptocurrency exchange, informed a Canadian provincial regulator last year that it would no longer be accepting new customers. The industry’s giant seemingly opted to pull out of Ontario, rather than comply with securities law or face regulatory scrutiny.

Ontario’s securities watchdog also said Binance has provided an “undertaking” to cease trading for existing Ontario-based accounts. Facing the threat of regulatory sanctions, the exchange updated its terms of use, declaring Ontario a “restricted jurisdiction.” As a result, Binance has blocked services in Canada’s most populous province and asked Ontarians to take immediate measures to close out their trading positions.

The OSC statement went on to warn that it reached out to other crypto-asset trading platforms to initiate the registration process, or face enforcement action, including temporary orders.

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