Coinbase Bolsters International Expansion Efforts With Restricted Dealer License In Canada

US-based cryptocurrency exchange Coinbase has obtained a registration license in Canada, signaling its intention to expand internationally amid increasing regulatory scrutiny in the US market, led by the Securities and Exchange Commission’s (SEC) ongoing crackdown on the industry. 

The company announced that it has been registered as a restricted dealer in Ontario under the Canadian Securities Administrators (CSA) oversight, a collective body of provincial and territorial securities regulators in Canada. 

This regulatory victory gives Coinbase the legal authority to conduct crypto asset transactions while meeting the requirements set forth by Canadian regulators.

Binance Out, Coinbase In 

According to a CNBC report, Canada implemented new guidelines for cryptocurrency exchanges last year, introducing limits on investments from certain investors and requiring crypto firms to register. 

These policy changes prompted Binance, the world’s largest crypto exchange by trading volume, to exit the Canadian market, citing an untenable operating environment. 

Meanwhile, rival exchange Kraken initiated the process of becoming a registered dealer in Canada by filing a pre-registration undertaking (PRU) with the Ontario Securities Commission.

According to the report, Coinbase filed its Pre-Registration Undertaking (PRU), a formal application made by the exchange to Canadian regulators, in March 2023 and officially launched its services in Canada in August of that year. 

The company proudly claims to be Canada’s first international cryptocurrency exchange to receive restricted dealer registration. Lucas Matheson, Coinbase’s country director for Canada, emphasized the following: 

It’s something we’ve been working on for almost three years here in Canada, and more specifically with the Ontario Securities Commission over the last 12 months. We’ve been working diligently with our regulators over the past year on building a compliant platform in Canada to bring to Canadians

Matheson highlighted Canada’s comparatively accommodating regulatory environment, especially in comparison to the challenging landscape faced by Coinbase and the broader crypto industry in the United States. 

Notably, Canada launched the world’s first spot Bitcoin exchange-traded fund (ETF), the Purpose Bitcoin ETF, three years before the US. In addition, Matheson expressed optimism about the market opportunity in Canada, citing the country’s “highly educated” and “tech-savvy” population, which the Coinbase director said has a deep understanding of the digital economy.

Regulatory Success

By registering in Canada, the exchange aims to enable Canadian customers to participate in the digital economy by leveraging its reputation, regulatory compliance, and prior regulatory approvals. 

As part of its global expansion strategy, Coinbase has established a technology hub in Canada and currently employs nearly 200 local professionals.

Coinbase’s license acquisition in Canada represents another success in its ongoing efforts to navigate regulatory landscapes worldwide. In pursuit of its “Go Broad, Go Deep” strategy announced in 2022, Coinbase has been actively pursuing local licenses in various international markets. 

The company has received individual approvals in several European countries, including Ireland, France, Spain, Italy, and the Netherlands. Ireland serves as the primary regulatory base within the European Union.

Ultimately, as Coinbase continues to expand its global presence, Matheson believes that the company’s track record of working closely with regulators before launching its services positions it favorably. 

Coinbase’s stock, traded under the ticker name COIN, is currently valued at $258, experiencing a notable surge of 6.8% following the news of its regulatory triumph in Canada.

Featured image from Shutterstock, chart from TradingView.com