DeFi Exchange dYdX to Halt Services for Canadian Users

dYdX, the decentralized finance (DeFi) crypto exchange, has announced that it will suspend its services to users based in Canada due to the country's regulatory climate. As of next week, Canadian users will no longer be able to trade on dYdX. This decision comes as the Canadian Securities Administrators has published new regulations that crypto exchanges must comply with.

Suspension of Services for Canadian Users

dYdX has already stopped onboarding new Canadian users and has announced that it will be exiting the country later this month. According to a blog post on the platform's official website, existing Canadian customers will have until April 14, 2023, to manage and liquidate all open positions on the exchange. At 17:00 UTC on April 14, all current Canadian clients on the stage will be moved to close-just mode, which will permit them to pull out their assets from the convention whenever.

The Censure Cautioning recognized the unexpected and problematic nature of dYdX's choice, however the trade refered to the administrative environment in Canada for its decision. The Canadian Securities Administrators' notice detailing enhanced rules and regulations that crypto exchanges were required to comply with earlier this year included increased oversight, custody rules, and a ban on margin/leverage, among other things.

Impact on dYdX's Governance Token

Following the announcement of the Canadian exit, DYDX, the governance token of the layer-2 protocol that powers the namesake DeFi exchange, took a considerable hit. The token initially dropped almost 5% to $2.4, causing its market capitalization to shrink by more than $30 million. However, the token quickly recovered and reached $2.51.

Conclusion

As the regulatory landscape in Canada shifts towards better compliance and consumer protection, dYdX has decided to halt its services for Canadian users. The exchange's decision was a result of the enhanced rules and regulations crypto exchanges were required to comply with in the country. Existing Canadian customers on the platform have until April 14 to manage and liquidate all open positions on the exchange, after which they will be moved to close-only mode, permitting them to pull out their assets whenever.