Bitfinex to leave Ontario as regulatory pressure piles up

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Bitfinex will no longer be serving residents of Ontario, Canada, starting March 1, 2022, the exchange has announced. Without giving the reason for its sudden exit from Canada’s largest province, the exchange advised local users to withdraw their assets before March 1, when it will close all their accounts.

In its “Important Notice,” Bitfinex revealed that some of the services would be discontinued immediately while the entire operation would be taken down in six weeks.

Bitfinex is making changes to the Services we provide to Ontario customers.

Please read the full announcement for more details on who is impacted: ⬇️https://t.co/ju3Y20R8Og

— Bitfinex (@bitfinex) January 14, 2022

Bitfinex users whose accounts have no balance will have their accounts closed immediately, the exchange said, while those who did not have open positions in their peer-to-peer financing markets will no longer be able to access these markets. They include such services as providing funding to margin traders or using the Bitfinex Borrow platform.

“Ontario customers who do not have open margin positions or “borrowing” positions in our peer-to-peer financing markets will no longer have access to open margin positions or engage in “borrowing” (e.g., receiving funding for margin trading or using Bitfinex Borrow),” the exchange added.

On March 1, Bitfinex will completely deny users from Ontario access to the platform.

“Any Ontario customers who have open positions in our peer-to-peer financing markets are advised to immediately start exiting those positions in preparation for March 1, 2022. Additionally, Ontario customers should withdraw funds from Bitfinex on or before March 1, 2022.”

Bitfinex didn’t reveal the reason for its sudden departure from the most strategic province in Canada. Ontario is the largest province in the country and is home to 15 million residents. It encompasses Toronto, Canada’s largest city, and Ottawa, the country’s capital.

However, it’s very likely that the exchange decided to wind down its services in Ontario due to regulatory pressure. Ontario has been one of the most stringent jurisdictions globally, with some of the world’s largest exchanges being booted out by the Ontario Securities Commission (OSC).

The latest to be blacklisted by the OSC is Binance, an exchange that’s quickly running out of jurisdictions in which it’s not at odds with regulators. As CoinGeek reported, the OSC issued a statement on December 30, 2021, saying Binance had been operating illegally in the province, just like it had been doing in Singapore, the Cayman Islands, South Africa, China, and dozens of other jurisdictions around the world.

Binance had been warned against offering its services in Ontario without obtaining a license. In its usual reckless fashion, the exchange told its users that “as a result of ongoing and positive cooperation with Canadian regulators, there is no need for Ontario users to close their accounts.”

After the OSC publicly denied any positive talks between the commission and Binance, the exchange retracted its earlier statement, claiming, “We did not meet directly with the Ontario Securities Commission about our intentions, which was clearly an error that we are correcting. We will provide updated guidance to users as soon as possible.”

A number of exchanges, including ByBit, OKEx, Poloniex (now Polo Digital Assets), and KuCoin, have already been booted out of Ontario thus far.

iFinex, the parent company of Bitfinex, has been at odds with the OSC before when Tether, its stablecoin subsidiary, was banned from Canadian exchanges. The OSC prohibited local exchanges from offering USDT at a time when charges of market manipulation were rife, the first time it had restricted any digital asset in the province.

“With respect to Tether and Bitfinex, the report by the New York AG likely did not provide comfort to the securities regulators and in the eyes of a government regulator, is likely going to be viewed as high-risk,” Christine Duhaime a Canadian lawyer said at the time.

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Ethereum, FTX and Tether—who have co-opted the digital asset revolution and turned the industry into a minefield for naïve (and even experienced) players in the market.