dYdX Shuts Down Operation in Canada Citing Regulatory Restrictions

dYdX, a decentralized derivatives exchange, has decided to cut off Canadian users from using its services.

Therefore, dYdX will no longer onboard new users from Canada on its platform. Existing users can continue trading but are expected to close their positions within seven days of the announcement. By April 14th, dYdX users in Canada will be transferred to close-only mode with only the ability to withdraw assets.

“dYdX is winding down user access from Canada. We realize that this restriction may be disruptive to certain users and regret any inconvenience. On April 7th at 17:00 UTC, dYdX will no longer allow new users located in Canada to onboard to the exchange. As part of the wind-down process, we want to provide existing Canadian users ample time to manage and close their positions on dYdX,” as per a blog post by the derivative exchange.

“Therefore, existing users will be able to continue to execute trades on our platform for one week. On April 14th at 17:00 UTC, dYdX will move all existing users in Canada to close-only mode, and users will maintain the ability to withdraw funds from the protocol at any time.”

Canada Becomes Tougher For Crypto Firms

Markedly, the derivative exchange made this decision to exit the Canadian market due to unfavorable regulatory conditions.

Canada has become very strict towards cryptocurrency-related organizations probably due to the implosion of Bahamian-headquartered exchange FTX which happened five months ago. Regulators in the region have introduced more restrictions on crypto exchanges that plan to offer their products and services to Canadians.

Crypto enthusiasts in the region are not even permitted to trade with any crypto asset that qualifies as a security or derivative.

In December, Canada’s biggest pension fund, CPP Investment (CPPI) suspended its research on crypto and other blockchain-related businesses as an investment option. Shortly after, the Canadian Securities Administrators (CSA) announced the enforcement of stricter measures. These stricter regulations included a prohibition on providing margin or leverage trading services. 

As it stands, dYdX is still optimistic that the situation in Canada may change in the near future and when it does eventually, the exchange will “resume services in the country.”