Photo showing Coinbase in Suqian, Jiangsu Province, China, June 6, 2023 (Photo illustration by Costfoto/NurPhoto via Getty Images)
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The cryptocurrency exchange said the approval means it meets Canadian regulators' strict requirements for cryptocurrency asset trading and can operate legally in the country.
Last year, Canada introduced new guidelines for crypto exchanges that limit the amount certain investors can invest in cryptocurrencies and introduced registration requirements for crypto companies.
As a result of this policy change, Binance, the world's largest cryptocurrency exchange by trading volume, has ceased operations in Canada, stating that operations in the country are “no longer sustainable.”
Rival cryptocurrency exchange Kraken announced last year that it had applied for a pre-registration agreement (PRU) with the Ontario Securities Commission, effectively beginning the process to become a registered dealer in Canada.
Coinbase applied for PRU in March 2023 and later officially launched in the country in August of the same year. According to the company, it is the first international cryptocurrency exchange to receive restricted dealer registration in Canada.
“This is something we've been working on here in Canada for nearly three years, and more specifically over the past 12 months with the Ontario Securities Commission,” Lucas Matheson, Coinbase's country director for Canada, told CNBC. This is something we have been working on together with.”
“We have worked diligently over the past year to work with regulators to build a compliant platform in Canada that we offer to Canadians.”
Matheson said Canada's regulatory environment is more tolerant of crypto platforms compared to the United States.
Coinbase, and the broader cryptocurrency industry, is facing major backlash from the U.S. Securities and Exchange Commission over a major lawsuit over securities law violations.
Matheson noted that Canada launched the world's first spot Bitcoin exchange-traded fund long before the United States. The Purpose Bitcoin ETF has now been trading for the past three years.
Matheson said the market opportunity in Canada is huge.
“We have a highly educated, tech-savvy population here who understands the digital economy,” Matheson told CNBC.
“Our Canadian registration makes us the first international and largest cryptocurrency exchange registered in Canada. This will enable us to help millions of Canadians access the digital economy. We are in a very good position to do so.”
Canada is home to several prominent technology companies, including e-commerce giant Shopify and artificial intelligence startup Cohere. Coinbase CEO Brian Armstrong visited the country in November 2023 to meet with the local team and participate in a hearth conversation with Shopify CEO Tobi Lutke.
Coinbase has a technology presence in Canada with nearly 200 full-time local employees.
As the company looks to expand further globally, Matheson said it is taking advantage of Coinbase's status as an exchange that received regulatory approval before launching.
“We have a strong brand here in Canada as a publicly traded company, as a compliant company, and as a registered company more broadly around the world,” he said. “I think Coinbase is building a strong customer base of clients who believe in our platform and, as you know, our mission at Coinbase.
The license marks the latest victory for Coinbase, which is embarking on a global appeal offensive to sway regulators and drive its platform deeper overseas.
In 2022, Coinbase completed a so-called “broad and deep” strategy aimed at hiring new leaders and replenishing local licenses in various international markets.
Last year, Coinbase selected Ireland as its primary regulatory hub in the European Union, aiming to take advantage of the EU's new crypto rules. The company has also received separate approvals in France, Spain, Singapore, Italy, Ireland and the Netherlands.
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