Deribit Becomes Unavailable to Canadian Residents

[Statistical Trader]

I'm interested in others' opinions:

1. Where should Canadian residents with Deribit accounts for trading crypto derivatives consider migrating their funds?

2. Is it likely that other crypto derivatives exchanges that currently accept Canadian residents will soon cease business with Canadian residents, as well?

Obviously I'm aware of the other exchanges. I'm looking for informed opinions.

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DERIBIT NOTIFICATION
___________________

Dear client,



Due to the recent regulatory developments in Canada, we have unfortunately decided to cease our services to our Canada-based clients. Canada has become a restricted country for Deribit. These restrictions are in response to the guidance as set out in Canadian Securities Administrators Staff Notice 21-332.



According to the information you have provided to us for the onboarding, you (or your company) are based in Canada. Therefore, we are sending you this email. If you are no longer a resident of Canada, please let us know.



As of tomorrow, 24 March 2023 at 12 AM UTC, it will unfortunately no longer be possible for you to open new positions on our platform (Reduce Only mode). We kindly ask you to close any open positions and withdraw your funds before 30 June 2023 at 12:00 am UTC. Please bear in mind that your account might have a withdrawal timer before new withdrawal addresses are to become active.



Should you have further questions, please contact support@deribit.com.



Deribit would like to thank you for your support.

 

[The_Krakenite]

I am confused here. Canadians were never supposed to be allowed to use Deribit in the first place as I recall. Kinda like, how Canadians were not supposed to use BitFinex, until it became 'official & in your face by force'.


You can always just go through the Montreal Derivatives Exchange and trade options on the crypto ETFs.

For an added fail-safe, you can also purchase the underlying ETFs on the Toronto Exchange if you plan to short CALLs.

 

[Statistical Trader]

Canadians were never supposed to be allowed to use Deribit in the first place

I don't really know what that means. Several years ago I applied, I filled out all the forms correctly, and I opened an account. Deribit didn't have any issues with it and I wasn't aware I was doing anything wrong.

What does it mean that I wasn't *supposed* to be allowed? Was it illegal? Was it legal but discouraged? If so, discouraged by whom?

Deribit sent a mass email today, so I must not be the only one...

 

[The_Krakenite]

You may have been grandfathered in, or had a new team-member who didn't properly follow the KYC rules for who was acceptable, etc. We could come up with theories all night. In any case, it doesn't matter now.

You're the only Canadian I know who managed to get an account there for trading derivatives.

BitFinex had disclaimers out for Canadians. Of course, a lot of us would just ignore the disclaimer and go ahead doing what we wanted... like loaning out things we weren't supposed to on the platform, etc.

Eventually, they got forced, to force Canadians off too when regulation brought down the enforcement hammer.

Was fun while it lasted.

For a time, it was the only big exchange where you could loan your Ethereum out for example, and set what interest rate you wanted to be paid at.

Ever since crypto ETFs hit the scene, I just loaded up on them in my IBKR account, and my broker loans out the ETFs. They keep half the interest (sorta like BitFinex), but I get the other half. The rates are pretty high, like up to 30% APR which is crazy. And even better, they are insured with no counter-party risk.

 

[traider]

You may have been grandfathered in, or had a new team-member who didn't properly follow the KYC rules for who was acceptable, etc. We could come up with theories all night. In any case, it doesn't matter now.

You're the only Canadian I know who managed to get an account there for trading derivatives.

BitFinex had disclaimers out for Canadians. Of course, a lot of us would just ignore the disclaimer and go ahead doing what we wanted... like loaning out things we weren't supposed to on the platform, etc.

Eventually, they got forced, to force Canadians off too when regulation brought down the enforcement hammer.

Was fun while it lasted.

For a time, it was the only big exchange where you could loan your Ethereum out for example, and set what interest rate you wanted to be paid at.

Ever since crypto ETFs hit the scene, I just loaded up on them in my IBKR account, and my broker loans out the ETFs. They keep half the interest (sorta like BitFinex), but I get the other half. The rates are pretty high, like up to 30% APR which is crazy. And even better, they are insured with no counter-party risk.

Which ETF has 30% borrow? BITO is quite low last I checked.

 

[Statistical Trader]

Now it's Bitstamp...

Hi,

We’re sad to inform you that Bitstamp will no longer offer services to new or existing customers residing in Canadas. Ever since 2011, we’ve remained committed to ensuring compliance with regulatory requirements in each of our operating jurisdictions. However, we remain dedicated to providing services in Canada and are hopeful that we will be able to do so again in the future. To begin this process, we will be disabling all fiat & crypto deposits for Canadian customers starting on Friday, March 31, 2023.

Here is the full timeline for your account closure with steps that you need to take:

1. As of March 31st, 2023, you will no longer be able to stake new ALGO or ETH.
   1. If you are currently staking ALGO: Your previously staked ALGO will be automatically unstaked as of March 31, 2023, and the rewards you will earn by the end of the first quarter of 2023 will remain the same. You will be able to receive these rewards by April 10th, 2023, without any impact. If you wish to stop staking ALGO before March 31st, you have the choice to opt out.
   2. If you are currently staking ETH: You can sell your staked ETH until May 15, 2023. After the Shanghai upgrade, we will unlock your staked ETH, but this will depend on whether the upgrade has been successful or not. We’ll keep you updated on any developments regarding the upgrade.
2. Please note that all trading pairs will be disabled as of May 15, 2023, and if you have any open trading positions, you must close them by then. If you don’t, we will automatically close the remaining trading positions.
3. After May 15, 2023, your account will be blocked until we are able to offer services in Canada again, but you will be able to withdraw your funds either in crypto or fiat at any time you wish.

If you are facing any issues withdrawing your assets, please contact our support team immediately at support@bitstamp.net and we’ll get back to you.

If your residential address has changed and you no longer reside in Canada, please inform us as soon as possible. We can change your address so you can continue using your Bitstamp account outside of Canada.

Know that we are maintaining communication with regulatory authorities and hope to resume our services in the future. If you have any questions, please do not hesitate to contact us.

We apologize for any inconvenience and thank you for your understanding in this matter.

The Bitstamp team

 

[The_Krakenite]

I'm not so sure that Bitstamp was supposed to be Canadian friendly to begin with (unless they relaxed very recently?).

So these letters are hardly surprising.

 

[Statistical Trader]

No, I've had an account with Bitstamp for many years. Are you in Ontario, by any chance? I know the OSC has been more crypto-cautious than some other jurisdictions in Canada. I think it's the recent coordination of provincial securities regulators under the CSA that is leading to these changes in certain parts of Canada where there hadn't been issues before.



For example... (source)

“When we saw FTX, (we) around the CSA table got together immediately and asked ourselves, ‘What do we want to do here?’” said Stan Magidson, chair and chief executive of the Alberta Securities Commission, who was named CSA chair in July.



He said the Ontario Securities Commission “got the ball rolling” on crypto regulation following the collapse of large domestic player QuadrigaCX in 2019, but “there were slightly different perspectives within the CSA” for some time.



He said Monday’s statement represents “a uniform approach coast to coast to coast” that was arrived at “after the journey and a lot of thought given to what was the right thing to do.”



The Ontario Securities Commission, Canada’s largest capital markets regulator, has taken a hard line on crypto operators over the past couple of years, including tangling with FTX behind closed doors and ordering the firm to immediately halt the sale of crypto assets and derivative products to all Ontario retail investors until it was properly registered or obtained restricted dealer status, sources have told the Financial Post.



Still, there were many FTX clients outside Ontario. Sources familiar with the matter estimate the platform had more than 30,000 users in Canada when it ran into trouble.

 

[The_Krakenite]

Yes, I am in Ontario. Anything to do with Binance was also banned here. The expectation was then that Binance was going to buy out BitBuy or CoinBurry in order to get their license through a shell-company.

But then WonderFi bought them both out first.

Then it was expected Binance would come after WonderFi, but then Circle Square got there first for the next take-over...

It was also expected that Binance would come out after Netcoins... but then Bigg Digital Assets bought them out first. LOL

No luck/fun for Binance here... (yet). For all the money they have, luck isn't favoring the bold, ehh?