- Coinbase has resisted the Canadian crypto market exodus.
- As part of efforts to work within the system, the exchange has initiated dialogue with regulators to ease crypto restrictions.
- Coinbase’s inroads with Canadian regulators contrast the exchange’s experience at home.
Following the collapse of FTX in November 2022, several jurisdictions, including Canada, have tightened regulations around the crypto industry. While these increased restrictions have proven to be deal breakers for firms like Binance, OKX, and Bybit, a few others, like Coinbase, have chosen to stick it out and work within the system.
In the latest instance, Coinbase is reportedly in talks with regulators and politicians to broaden the scope of what is possible for crypto firms in Canada.
Coinbase in Talks With Canadian Regulators?
On Monday, February 19, CoinDesk reported that Coinbase is in open dialogue with Canadian regulators and politicians to loosen crypto regulations, highlighting the firm’s move to join the Canadian Web3 Council and citing comments from an interview with Coinbase Canada Country Director Lucas Matheson.
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Per the report, Coinbase’s initial efforts appear to be directed at introducing derivative and leverage trading products to the Canadian market. Regulators had restricted leverage trading and stablecoins in an enhanced Pre-Registration Undertaking (PRU) for crypto firms.
“We’re working with our industry partners like the Web3 Council and regulators to explore a path forward to bring derivatives and leverage products for both the retail and institutional market in Canada,” Matheson reportedly asserted.
Coinbase did not immediately respond to a DailyCoin request for comment on whether the scope of its rulemaking talks with regulators went beyond launching derivative products in the country.
Still, the exchange’s inroads with Canadian regulators directly contrast its ongoing experience in the U.S., where it has struggled to get regulators, particularly the SEC, to the table.
Different Strokes
In the U.S., the SEC has maintained that most crypto assets are unregistered securities. However, most crypto industry participants argue that the agency’s process of classifying these assets as securities and the path to registration is unclear.
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Coinbase filed a petition for rulemaking with the SEC in July 2022 to gain clarity. After getting the silent treatment for nearly a year, the exchange dragged the regulator to court for a response in April 2023.
In December 2023, the SEC denied Coinbase’s petition, maintaining that regulators did not need to work with industry participants on tailored rules as existing securities laws are sufficient to govern the nascent market.
With the stance that existing securities laws are enough, the SEC has embarked on an enforcement campaign that has seen several leading crypto exchanges, including Coinbase, charged with operating unregistered securities platforms.
On the Flipside
- The scope of Coinbase’s discussions with Canadian regulators remains unclear.
- Whether Coinbase’s discussions with regulators would yield positive results for the industry in Canada also remains to be seen.
Why This Matters
Coinbase’s discussions with Canadian regulators hint at hope of broader horizons for crypto in the country. They also highlight the potential contrasts in the regulatory approaches of Canadian and U.S. regulators.
Read this for more on Coinbase’s perseverance in Canada:
Coinbase Resists Canadian Crypto Exodus with “Official Launch”
Learn more about Binance’s decision to shut down its leveraged token service:
Binance to Axe Leveraged Token Service After Slow Wind-Down
