In addition, within one week of OKX’s announcement that it plans to depart the country in March, Kraken experienced a spike in app downloads that was five times higher than before.
Kraken is reaping the benefits of continuing in Canada after competitors such as Binance and OKX announced plans to exit.
After Binance announced its exit in early May, Kraken’s Canadian customer deposits increased by 25%. Within a week after OKX announced its departure in March, the company’s two mobile apps for Canadian users experienced a fivefold rise in downloads.
Early this year, Canada strengthened its regulatory framework for trading in digital assets, which led to the departure of various biggest cryptocurrency exchanges. Paxos, Blockchain.com, and Deribit are just some of the cryptocurrency companies that have announced that they will be exiting the space. Binance, which is the largest cryptocurrency exchange as measured by volume traded, and OKX are also leaving the market. Bybit, which left earlier this week, was the most recent exit.
Due to competitors like Binance and OKX announcing plans to withdraw from Canada, cryptocurrency exchange Kraken is benefiting from existing there.
Coinbase (COIN), a Nasdaq-listed exchange, expressed its happiness to commit to Canada’s strengthened Pre-Registration Undertaking (PRU), similar to Kraken. Coinbase even stated that it enjoyed dealing with a regulator it could interact with in contrast to the lack of transparency in the U.S.
Mark Greenberg, the company’s managing director for Canada, noted that Kraken has been operating in the country for more than ten years, employs more than 250 people there, and started offering money services in the nation in 2019.
In an interview, Greenberg stated, “I think the Canadian regulatory approach works for us. “There were aspects of it that we really liked; things that we’ve been doing forever, like the emphasis on client asset security, for instance. There are also aspects of it that we don’t like as much, like some of the trading and margin constraints.
The requirement that businesses retain a sizable portion of customer funds with a third-party custodian is one of the stringent new standards for cryptocurrency exchanges set out by the Canadian Securities Administrators (CSA) earlier this year.
As part of the commitments we’ve made, “we’ve all agreed to use a third-party custodian, and I think we will continue to have that discussion with the regulators,” said Greenberg. There are advantages and disadvantages to this, and I believe the regulator is aware of these benefits and drawbacks as well as the alternatives. The security and confidentiality of our client’s assets, and the fact that they are closed off from rug pullers and other illicit activities, are eventually what matters most to us.
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