Canadian crypto regulations are encouraging, says WonderFi CEO

On Aug 17, 2023

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The Canadian crypto industry has seen an increase in interest and activity by traditional financial institutions following the increase in regulatory efforts and clarity by the Canadian government, according to Dean Skurka, President and CEO of Canada-based exchange WonderFi.

In an interview with Cointelegraph during the Blockchain Futurist conference in Toronto, Skurka stated that the platform had witnessed a rise in trading by institutions compared to retail investors.

“What we have seen in the first half of this year is growth in our OTC institutional segment,” he said, adding that “These institutional investors, more sophisticated investors, are [more] immune to sentiment and trends in the market, and they’re more fundamental in their investment approaches. […] We’re starting to see, […] through clear regulation, that the segment of our client base is shifting quite a bit.”

Great news for Canada’s crypto industry! According to WonderFi CEO Dean Skurka, clear regulations may have increased costs, but they have also attracted more institutional interest in cryptocurrencies. 🚀🇨🇦 #CryptoRegulations #InstitutionalInvestors #CanadaCrypto
— Block Savvy (@Block_Savvy) August 16, 2023

Over the recent months, the Canadian government and regulators have ramped up their efforts to regulate the crypto industry resulting in increased criticism that their rules are too difficult to follow.

As a result, many crypto exchanges have wound down operations in the country, citing tight and stringent rules. Binance, for instance, withdrew its services from the country early in May due to the new stablecoin regulations it found challenging to adhere to.

Bybit, on the other hand, also announced the halting of operations and registering new Canadian accounts due to the recent regulatory developments.

WonderFi’s Success Amid Increasing Regulation

In contrast, WonderFi has grown and thrived in the new regulatory environment due to the increased clarity, says Skurka. He stated that there are very few platforms offering crypto services to institutional investors as WonderFi does.

As such, in addition to regulatory clarity, the platform has captured the institutional audience’s interest in increasing crypto activity.

“We’ve seen an increase in activity, not only on the institutional side but also on products that we’ve rolled out that are catered to long-term holders like staking,” he said.

Skurka said his exchange broke through during this challenging regulatory period because it provided services to long-time holders in Canada, who had been left underserved by the collapse of Voyager and Celsius.

In the aftermath of these bankruptcies, Canadian regulators have increased the cost of operating crypto exchanges, potentially as a way of protecting investors. This has made it difficult for some businesses to keep up and stay operational in the market.

However, according to Skurka, for the crypto industry to be able to bear the new costs, there was a need for consolidation. As such, the company has been working to acquire and merge with other smaller exchanges, such as BitBuy and Coinberry, in 2022.

This year, WonderFi has worked on a merger with Coinsquare and CoinSmart, slowly increasing its market share in the already underserved market. According to Skurka, this creates a “clear market leader “with the scale to operate in a compliant environment.

CoinSmart announced it would merge with WonderFi and Coinsquare in April, creating one of the largest crypto trading platforms in Canada with more than 1.6 million users — there are roughly 38 million people in Canada. pic.twitter.com/LAnU2831WO
— Calvin Faulkner (💙,🧡) (@CalvinF63184215) August 17, 2023

Exchanges Bloom in Regulatory Clarity

Kraken, one of the largest crypto exchanges, has also stated that it appreciates the regulatory clarity brought about by the new rules established in the country. While the company did not cease operations when its peers, such as Binance, were closing shop, the exchange says that its better guaranteed to survive in the market with the new regulations.

“The Canadian regulators have been collaborative and helpful. […] There’s a clear regulatory pathway. It’s allowed us to invest in the country,” said Kraken managing director for Canada Mark Greenberg.

Greenberg, however, acknowledged the difficulty of adhering to the new rules saying,” It’s not the easiest thing to meet those requirements, especially for smaller platforms […] that just weren’t able to put that kind of energy against it.”

Other established exchanges seem to draw strength and encouragement from the Canadian crypto regulations. As a result, Coinbase is launching an Interac e-transfer integration as part of its Canadian offerings.

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Canada has emerged as a very crypto-friendly jurisdiction, with smart regulations that protect consumers while supporting innovation.
The country has top talent and tech infrastructure to become a real hub for crypto development.
— Keytom.io | Magic of Web3 payments (@keytomio) August 17, 2023

The crypto firms and exchanges have termed the Canadian authorities collaborative and easy to work with to ensure a safe and stable crypto market for Canadian users.

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