CryptoCom To Delist USDT in Canada Due To Regulatory Pressures

On January 9, Crypto.com announced the delisting of USDT —the most important stablecoin in the crypto ecosystem— in Canada to comply with the country’s regulations.

Several users on Reddit and Twitter reported that Crypto.com sent an email informing Canadian users of the decision.

Canadians Must Get Rid of Their USDT Before January 31

According to the statement, users will have until January 31 to withdraw or exchange USDT for any other currency. Failure to do so will result in all USDT balances automatically converting to Circle’s USDC stablecoin.

Reddit user zoomercoomer9000 confirmed that Canadian regulators issued a statement in late December informing that cryptocurrency platforms that are registered or in the process of registering were prohibited from allowing Canadian customers to trade cryptocurrencies that “are themselves a security and/or derivative.”

“As a result of this ongoing work, the CSA is of the view that stablecoins, or stablecoin arrangements, may constitute securities and/or derivatives. Crypto trading platforms that are registered or that have entered into a pre-registration undertaking are reminded that they are prohibited from permitting Canadian clients to trade, or obtain exposure to, any crypto asset that is itself a security and/or a derivative.”

Community Speculates on What Happened —And Why

For many users, the delisting of USDT in Canada was seen as a glimpse of what could happen globally if regulators in other countries decide to attack cryptocurrencies with more burdensome regulations.

Others argued that the cause of the delisting was Crypto.Com’s good relationship with Circle, the issuer of USDC and that it was all a “business deal” to eliminate competition. Something very similar to what Binance did against USDC.

User zoomercoomer9000 added that “Tether has a pretty shady history,” explaining that they previously lied about their 1:1 peg to the US dollar and did not disclose their association with Bitfinex until it was exposed in the Paradise Papers.

Meanwhile, other users reported that the delisting of USDT is “a big problem for Canadians,” as it leaves them with fewer options for earning interest on their money.

While the vast majority were unhappy with the actions taken by Crypto.com, other users indicated that regulations are the only way for cryptocurrencies to become more widespread and for big players to enter the ecosystem.

So far, Crypto.Com has not made an official statement on the issue but did confirm the decision to other media. They also did not clarify if this was a temporary or permanent ban, so it must be taken as effective until further notice.