Pamela Draper, president and CEO of crypto platform Bitvo, has weighed in on firms escaping the Canadian market amid the regulatory environment.
Speaking to Cointelegraph at the Collision Conference in Toronto on June 29, Draper said despite crypto companies like Binance, dYdX, and Bybit announcing their departure from Canada in 2023, the country was “one of the few jurisdictions where there’s actually a regulatory regime in place that you can follow.” She cited cases in the United States, where Binance and Coinbase both face lawsuits from the country’s Securities and Exchange Commission.
“At least in Canada you have a framework you can follow where you know the guidelines,” said Draper. “You may not necessarily agree with every single aspect of it, but you know the sandbox.”
She added that certain firms with operations in other countries may not be willing to “make the investment” in Canada amid the regulatory framework. Canadian regulators imposed requirements in 2021 giving crypto firms two years to register as an “investment dealer” or “regulated marketplace”, with the expectation they would be in compliance in 2023.
“It’s a lot of work and money to comply with the regime in terms of the staff that you need to set up, the infrastructure that you need to set up, the legal fees that you need to work through the process to to get your license with the securities commission.”
In June 2022, now-defunct crypto exchange FTX announced plans to purchase Bitvo as part of its move into Canada. The deal fell apart in November when FTX declared bankruptcy and former CEO Sam Bankman-Fried was subsequently arrested in the Bahamas.
According to Draper, she initially wasn’t concerned about the reports involving FTX’s liquidity in early November 2022 because many saw the exchange as the “poster child for pushing regulation forward”. She cited a $400-million funding round for FTX, maintaining the firm’s multi-billion dollar valuation at the time.
“The fact they [FTX] were doing something untoward seemed really inconsistent with what Sam was saying publicly and the whole narrative around our merger acquisition,” said Draper. “If we had been acquired, absolutely we would have been wrapped up in the bankruptcy proceedings […] I don’t think anyone on the planet expected FTX to fall from grace the way that they did.”
“A lot of the bad actors have been shaken out of the market, and I believe the ones that are remaining are on balance more good than bad.”
Bybit, Binance, dYdX, OKX, and Paxos are among the firms which have announced a scaling back or exit of operations in Canada. Amid the Collision Conference, which ran from June 26 to June 29, Canadian lawmakers in the country’s House of Commons also released a report highlighting the advantages and potential of blockchain technology in various sectors.