Pamela Draper, president and CEO of crypto platform Bitvo, has weighed in on companies fleeing the Canadian market amid the regulatory environment.
Speaking to Cointelegraph at the Collision conference in Toronto on June 29, Draper said that although crypto companies like Binance, dYdX, and Bybit have announced they will be leaving Canada in 2023, the country was “one of the few jurisdictions where there is already a regulatory regime in place.” You can continue.” It cited cases in the United States, where both Binance and Coinbase face lawsuits from the country’s Securities and Exchange Commission.
“At least in Canada, you have a framework that you can follow where you know the guidelines,” Draper said. “You may not necessarily agree with every aspect of it, but you know the sandbox.”
It added that some companies with operations in other countries may not be willing to “invest” in Canada amid the regulatory framework. Canadian regulators imposed requirements in 2021 to give crypto companies two years to register as an “investment dealer” or “regulated market,” with the expectation that they will be in compliance in 2023.
“Adhering to the system takes a lot of work and money in terms of the staff you need to set up, the infrastructure you need, the legal fees you need to work through the process to get your license to the SEC.”
In June 2022, cryptocurrency exchange FTX announced its plans to acquire Bitvo as part of its move to Canada. The deal collapsed in November, when FTX declared bankruptcy and former CEO Sam Bankman-Fried was later arrested in the Bahamas.
Related: How security, education, and regulation can mitigate rising cryptocurrency scams
According to Draper, it was initially uninterested in reports of FTX liquidity in early November 2022 because many saw the exchange as “the poster child for pushing forward regulation.” It cited a $400 million funding round for FTX, maintaining the company’s multi-billion dollar valuation at the time.
“The fact that they (FTX) were doing something untoward seemed really inconsistent with what Sam said publicly and the whole narrative around our merger takeover,” Draper said. “If we had been acquired, we would certainly have been closed in bankruptcy proceedings. (…) I don’t think anyone on this planet expected FTX to fall from grace the way they did.”
“A lot of the bad actors have been pushed out of the market, and I think the ones that remain are in better balance than the bad ones.”
Bybit, Binance, dYdX, OKX and Paxos are among the companies that have announced the downsizing or exit of operations from Canada. Amidst the Collision Conference, which ran from June 26 to June 29, Canadian legislators in the Canadian House of Commons also released a report highlighting the benefits and potential of blockchain technology in various sectors.
magazine: Crypto Cleanup: How Much Enforcement Is Too Much?