Coinbase secures restricted dealer license in Canada

Coinbase now has two entities in Canada: Coinbase Canada, with an international dealer license, and Coinbase, registered as a restricted dealer.

The United States-based cryptocurrency exchange Coinbase has secured restricted dealer licenses in Canada, doubling down on global expansion amid regulatory crackdown at home.

Coinbase has obtained a new license in Canada, becoming registered in Ontario as a restricted dealer under the Canadian Securities Administrators (CSA), CNBC reported on April 4.

According to CSA’s national registration data, there are two Coinbase-related entities registered in Canada, including Coinbase Incorporated, which is registered as a restricted dealer. The other one, Coinbase Canada, is registered as an international dealer.

According to CSA, restricted dealer registration is “a special kind of dealing registration used for firms that do not quite fit under any other category.” Regulators establish individual requirements for firms with this status.

International dealers are not allowed to trade with Canadian customers in equity or debt securities of Canadian issuers other than government issuers, according to legal intelligence source JD Supra.

According to CNBC, the new authorization officially established Coinbase as a legally operating cryptocurrency firm in Canada.

“It’s something we’ve been working on for almost three years here in Canada, and more specifically with the Ontario Securities Commission over the last 12 months,” Coinbase’s country director for Canada, Lucas Matheson, reportedly said.

Cointelegraph approached Coinbase for a comment regarding the new license in Canada but did not receive a response at the time of publication.

Coinbase’s new license in Canada is not the first big move by the crypto exchange in the country. The exchange officially launched in Canada in August 2023 and subsequently expanded its services to Canadians through a partnership with the local financial services firm Peoples Trust Company.

Related: Coinbase Wallet triumph over SEC allegations is a ‘giant win’ for DeFi

As of April 2024, Coinbase has a tech hub located in Canada with nearly 200 full-time local employees, according to the CNBC report.

Some rival exchanges like Kraken have been taking steps to receive registered dealer registration in Canada. Kraken filed in March 2023 a pre-registration undertaking with the Ontario Securities Commission in Canada seeking restricted dealer status as well.

The move aimed to help Kraken comply with the CSA’s new guidance for crypto asset trading platforms issued in February 2023.

According to the new requirements, local crypto trading platforms should comply with stricter custody standards, restrictions on the use of leverage and a ban on trading stablecoins without prior written consent from the CSA.