Decentralized crypto exchange, dYdX, has announced that it will cease operations in Canada due to regulatory changes prioritizing consumer protection and compliance. The company has already stopped accepting new Canadian users and will exit the country completely by the end of April.
Existing Canadian users will have until April 14th, 2023, to engage in trading activities on the platform and manage any open positions. After this date, all Canadian users will be moved to a close-only mode, allowing them to withdraw their funds anytime.
dYdX cited the regulatory climate in Canada as the reason for its decision to exit. Earlier this year, the Canadian Securities Administrators issued new rules and regulations for crypto exchanges, which included increased oversight, custody rules, and a ban on margin/leverage, among other things.
The sudden exit of dYdX has been acknowledged by the company as disruptive. A Deprecation Warning on their website was issued to inform users of the move and the deadline for Canadian users to liquidate their positions.
The governance token of the dYdX DeFi exchange, DYDX, took a hit following the announcement of the Canadian exit. The token experienced a 5% drop in value to $2.4, causing its market capitalization to decline by over $30 million.
The regulatory changes in Canada are part of a broader shift towards better compliance and consumer protection in the crypto industry. This is in line with the increased scrutiny placed on the industry by regulators worldwide.
dYdX is a decentralized finance (DeFi) platform that enables users to trade cryptocurrencies and other digital assets in a decentralized manner. The platform is built on the Ethereum blockchain and operates using smart contracts, which allow users to trade assets without the need for an intermediary.