Regulators in Canada continue to clamp down on the crypto industry in recent weeks following the big-ticket collapses of Signature Bank, Silvergate, and Silicon Valley Bank. 💀

For instance, federally regulated pension funds will now be required to disclose exposure to cryptocurrencies. Last year, one of Canada’s largest pension funds, the Ontario Teachers’ Pension Plan, wrote down its $95 million investment in FTX to zero. Another pension fund, Caisse de dépôt et placement du Québec, wrote down $150 million after crypto lending firm Celsius filed for bankruptcy. 💵

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Following the downturn in crypto prices last year, Canadian regulators made it mandatory for crypto trading platforms (CTPs) to register with the authorities. These trading platforms will have to segregate assets held in custody while the rules have also tightened for margin trading, re-hypothecation, and certain stablecoin trades. 👀

Coinbase, which is the second-largest crypto exchange globally, stated it aims to stay in Canada despite tighter rules for digital asset exchanges. It also appointed Lucas Matheson as the new country director for Canada. Matheson joined Coinbase after leading operations and strategy for Canadian tech giant Shopify. 🛍

Kraken, another US-based crypto exchange, confirmed it would work with regulators to continue operations in Canada while Binance is rumoured to potentially be exiting Canada entirely. 🇨🇦

Meanwhile, WonderFi, CoinSmart, and Coinsquare, three major Canadian crypto companies, announced a merger to form Canada’s largest regulated crypto trading platform. The combined entity will have around 1.65 million users with $600 million in assets under management. 🤝

Will these regulations increase the cost of crypto ownership in Canada and make it expensive for participants to conduct business here? There is a good chance these developments will cause venture funding in blockchain, Web3 and cryptocurrency verticals to decelerate at a rapid pace – at least for now. 📉

It might also have an offshoring effect with firms looking to move out of Canada and shift base to crypto-friendly jurisdictions such as Dubai or Singapore. Unless of course Canadian authorities swiftly change their tone; sources tell us Ottawa’s actions toward crypto are far more supportive than its public (political) narrative. To be continued…👀