OKX, formerly known as OKEx, today informed its Canadian users that it would cease operations and no longer be accepting new customers effective March 24, 2023. The industry’s giant seemingly opted to pull out of Canada, rather than comply with securities law or face regulatory scrutiny.
OKX described its decision to quit Canada as “temporary” and that it’s working with the nation’s regulators to solve the issue.
“Your funds will remain safe in your account until you withdraw them. You will be able to withdraw dollars to your linked bank account and cryptocurrency to your self-custody wallet or your cryptocurrency account on another exchange. We hope to see you again in the future. Stay tuned,” wrote OKX staff.
Aux Cayes Fintech Co. Ltd., which operates the OKX platform, was under fire from a Canadian provincial regulator for allegedly violating Ontario securities law. This came at a time when major crypto plyers come under greater scrutiny after the stunning implosion of the erstwhile second-largest global crypto exchange FTX.
The recent move comes as Canada’s financial regulator is rolling out a co-ordinated oversight regime for cryptocurrency activities. Now, all crypto trading platforms seeking registration are obliged to sign undertakings to comply with investor protections.
The new rules will also make it more difficult for retail investors to trade cryptocurrencies using leveraged bets.
The Canadian Securities Administrators (CSA) plans to strengthen its oversight of cryptocurrency exchanges operating in the country. As part of a basket of new registration requirements, crypto applicants will have to agree to tighter rules, including a ban on margin and leverage trading.
Additionally, the proposal prevents crypto providers from accepting payments via credit cards and requires them to keep customer assets segregated from their own operational funds.
These measures also include suggestions that providers should be forced to hold all Canadian clients’ assets “with an appropriate custodian and segregate these assets from the platform’s proprietary business.”
To continue operating while their application is being processed, cryptocurrency platforms must give their primary regulator a pre-registration undertaking. By making these commitments, the crypto exchange 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 CSA went on to warn that it reached out to crypto-asset trading platforms to initiate the registration process, or face enforcement action, including temporary orders.
