Crypto exchange giant Coinbase (COIN) says it loves Canada, where the rules have been set out and companies are able to engage with the regulators, compared with the U.S.’s lack of clarity and regulation by enforcement for the industry.
It’s no secret that Coinbase is currently at loggerheads with the Securities and Exchange Commission (SEC), which has warned the exchange that its going to be targeted with an enforcement action for violating securities laws. The recent U.S. regulatory crackdown has also spooked many companies and investors, who are already looking to relocate to other jurisdictions.
Meanwhile, Canada is also putting pressure on the industry through its Pre-Registration Undertaking (PRU) regime for crypto exchanges, which saw several large players depart from the country, most notably Binance, the largest exchange group by volume.
However, when asked about how Canada’s PRU compared with the situation in the U.S., Nana Murugesan VP international and business development at Coinbase, said that he prefers Canada’s approach.
“There’s a couple of ways we see regulators acting: one is regulation by engagement; the other one is regulation by enforcement,” Murugesan said in an interview with CoinDesk. “The latter part is tough, because you don’t know what the rules are. But the Canadian regulator is definitely the former, which is regulation by engagement – which we love.”
Coinbase, which signed Canada’s enhanced PRU in March of this year and whose principal regulator is the Ontario Securities Commission (OSC), has been heavily invested in the country for years, with some 200 engineers based there, according Coinbase Canada Country Director Lucas Matheson.
The plan for Coinbase is now to provide a more seamless fiat to crypto experience for Canadian customers by introducing new payment rails, Matheson said. “Within the next few months, we will be adding Interac payment rails to our platform,” he said via email.
Interac is Canada’s interbank payment network that links local financial institutions to individuals and enterprises for the electronic payment systems.
With regulatory clarity provided by regulators and Binance out the way, Canada presents a solid opportunity for Coinbase.
“We don’t comment on our competitors,” said Murugesan. “But every company has its own path, and I think the developments in Canada are fitting our playbook quite well,” he added.