Cryptocurrency exchange Crypto.com has written to its users that it is removing USDT – the top-ranking stablecoin – for its Canadian users in compliance with the country’s regulations. In an email shared by sources on Reddit, the Hong Kong-based firm has given users until January 31 to exchange their USDT holdings or convert to other currencies.
According to the announcement, users who should not have converted their USDT balances will be automatically converted to USDC stablecoin. “Tether (USDT) will no longer be supported in the Crypto.com app. On January 31, 2023, at 01.00 EST, USDT will be delisted, and all USDT transactions will be suspended,” the announcement noted.
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Canada Tightens Controls Among Pre-registered Crypto Companies
Canada is keen to regulate new crypto firms operating in the country that have been registered or are in the process of undergoing registration. On December 12, the Canadian Securities Administrators (CSA) issued a statement describing stablecoins – such as USDT – as securities or derivatives.
“…CSA is of the view that stablecoins, or stablecoin arrangements, may constitute securities and or derivatives. Crypto trading platforms registered or entered into a pre-registration undertaking are reminded that they are prohibited from permitting Canadian clients to trade, or obtain exposure to, any crypto asset that is itself a security or a derivative,” the agency said.
Stablecoin USDT has been rumoured to lack the reserve backing it claims to have since its issuer, Tether Holdings Ltd, started releasing more of the currency into circulation. According to data shared by CoinMarketCap, the number of USDT in circulation currently stands at 66.27 billion, with an overall market cap of $66.28 billion, also ranked third in the crypto list. The fast-paced growth of the digital currency has caused concerns among the US regulators, including the SEC, which see the stablecoin as a threat to their financial systems.
