Paxos, a leading provider of blockchain-based financial infrastructure, has announced that it will be shutting down its operations in Canada. The decision was made due to regulatory uncertainty and a lack of clear guidance from Canadian authorities on the use of digital assets.In a statement released on Wednesday, Paxos CEO Charles Cascarilla said, “After careful consideration, we have made the difficult decision to wind down our operations in Canada. We have enjoyed serving our Canadian customers and appreciate their support over the years, but regulatory uncertainty has made it difficult to continue operating in the country.”
Paxos, which is based in New York, provides a range of blockchain-based financial infrastructure services, including a stablecoin called Paxos Standard and a cryptocurrency exchange called itBit. The company has been operating in Canada since 2018, offering its services to Canadian businesses and individuals.
The decision to shut down its Canadian operations comes amid a broader regulatory crackdown on cryptocurrency and digital assets in the country. Last month, the Canadian Securities Administrators (CSA) issued guidance on the regulation of crypto assets, which included a warning that many digital assets may be securities and subject to securities laws.
While the guidance provided some clarity on the regulatory landscape, it was also criticized for being too broad and vague, leaving many companies unsure of how to comply with the new rules. This uncertainty has led some companies, including Paxos, to reconsider their operations in Canada.
Despite the decision to wind down its Canadian operations, Paxos remains committed to expanding its services in other parts of the world. The company recently announced plans to launch a new stablecoin in the UK, and it continues to operate in other jurisdictions, including the US and Singapore.
The closure of Paxos’s Canadian operations is expected to be completed by the end of April, with the company working closely with its Canadian customers to ensure a smooth transition. The company has also said that it will continue to monitor developments in Canada and may consider re-entering the market in the future if regulatory conditions improve.
the decision by Paxos to shut down its Canadian operations highlights the challenges faced by blockchain-based companies in navigating a rapidly changing regulatory landscape. As governments around the world grapple with how to regulate digital assets, many companies are finding it difficult to operate in certain jurisdictions, and the future of the industry remains uncertain.