Pamela Draper, the president and CEO of Bitvo, a cryptocurrency platform, recently offered her insights on the departure of several crypto companies from the Canadian market due to regulatory concerns. Speaking at the Collision conference in Toronto on June 29, Draper highlighted Canada as one of the few jurisdictions with a regulatory framework in place that companies can follow. She contrasted this with the situation in the United States, where major crypto exchanges such as Binance and Coinbase are currently facing lawsuits from the Securities and Exchange Commission.
In Canada, crypto firms were given a two-year window, starting in 2021, to register as an “investment dealer” or “regulated marketplace” in order to comply with the regulations by 2023. Despite the regulatory framework providing clarity and guidelines, Draper acknowledged that the process of compliance requires significant investments in terms of human resources, infrastructure, and legal fees.
Draper referred to the failed acquisition of Bitvo by FTX, a now-defunct crypto exchange, as an example of the challenges faced by crypto companies in Canada. FTX had announced its plans to acquire Bitvo in June 2022 as part of its expansion into the Canadian market. However, the deal fell through in November when FTX declared bankruptcy, and its former CEO, Sam Bankman-Fried, was arrested in the Bahamas. Draper admitted that she initially had no concerns about FTX’s liquidity issues, as the exchange was seen as a proponent of regulation. The sudden downfall of FTX took everyone by surprise, and Draper acknowledged that nobody expected such a turn of events.
Despite the challenges, Draper voiced optimism and noted that the departure of some crypto companies from Canada had helped weed out bad actors from the market. She believes that the remaining companies are more likely to be responsible and compliant.
Related Post
Several prominent crypto exchanges, including Binance, Bybit, dYdX, OKX, and Paxos, have either scaled back or completely exited their operations in Canada due to regulatory concerns. These departures have raised questions about the future of the crypto industry in Canada.
Coinciding with the Collision conference, Canadian lawmakers in the country’s House of Commons released a report emphasizing the advantages and potential of blockchain technology in various sectors. The report showcases the growing interest and recognition of the blockchain industry in Canada, even as some crypto companies are withdrawing from the market.
In conclusion, while some crypto companies have decided to leave the Canadian market due to regulatory concerns, Pamela Draper asserts that Canada’s regulatory framework provides clarity and guidelines for firms to follow. Despite the challenges of compliance, Draper remains optimistic about the remaining companies in the market, believing that they are more likely to be responsible and compliant. The recent report by Canadian lawmakers on the potential of blockchain technology further highlights the growing interest in this space within the country.
