Bitvo’s President and CEO, Pamela Draper, discussed the impact of Canada’s regulatory environment on cryptocurrency firms and their subsequent departure from the market in an interview during the Collision Conference in Toronto. While acknowledging that several prominent crypto companies, including Binance, dYdX, and Bybit, have announced their exit from Canada in 2023, Draper emphasized that the country still provides a regulatory framework that businesses can follow.
Draper contrasted the situation in Canada with that of the United States, where Binance and Coinbase are facing legal actions from the Securities and Exchange Commission. She acknowledged that not every aspect of the Canadian regulatory regime may be agreeable to all stakeholders but highlighted the advantage of having clear guidelines and a regulatory sandbox.
However, Draper noted that some firms operating in other jurisdictions might be hesitant to invest in Canada due to its regulatory framework. In 2021, Canadian regulators introduced requirements stipulating that crypto firms must register as “investment dealers” or “regulated marketplaces” within two years and achieve compliance by 2023. The process involves significant investments in staffing, infrastructure, and legal fees, making it a demanding endeavor for businesses.
Draper also discussed the failed acquisition attempt of Bitvo by FTX in June 2022. Initially confident about the deal, she was surprised when the exchange declared bankruptcy, and its former CEO was arrested just months later. Draper highlighted how unexpected these events were, considering FTX’s reputation as an advocate for regulatory progress and its substantial funding round.
Despite the challenges faced by the Canadian cryptocurrency market, Draper believes that recent developments have contributed to removing bad actors from the industry. She expressed her belief that the remaining players are, overall, more aligned with ethical practices.
Several prominent crypto firms have announced scaling back or complete exits from the Canadian market, including Bybit, Binance, dYdX, OKX, and Paxos. Coinciding with the Collision Conference, Canadian lawmakers released a report underscoring the potential benefits of blockchain technology across various sectors.