Crypto exchanges are leaving the Canadian market due to regulatory changes from the Canadian Securities Administration. Meanwhile, Ohio introduced a bill to accept cryptocurrency for tax payments. In California, Governor Gavin Newsom vetoed an AI regulation bill due to concerns about stifling innovation. In Thailand, Kasikornbank's digital subsidiary launched the country's first licensed digital asset custodian, orbix Custodian, as part of its expansion plan in the digital asset space.
Gemini to Shut Down Canadian Accounts
Gemini, the crypto exchange that was founded by the Winklevoss twins, announced it will close all customer accounts in Canada by the end of 2024. In a Sept. 30 email to its Canadian users, the exchange informed customers that their accounts will be shut down by Dec. 31 of 2024, and that they had 90 days to withdraw their assets. According to the exchange, there are very limited exceptions to the closure, and most accounts will be affected.
This decision was made after the introduction of new regulations for crypto exchanges by Canadian financial regulators. Earlier in the year, the Canadian Securities Administrators (CSA) issued a notice that requires crypto trading platforms to sign a pre-registration undertaking to continue operating in the country. On April 13, Gemini adhered to the new requirements, and a spokesperson described Canada as a crucial and well-developed market for the company’s international expansion.
Gemini’s latest move is a major shift after its earlier efforts to comply with the Canadian regulations. It now joins a list of exchanges, including OKX, dYdX, Paxos, Bybit, and Binance, that have already exited the Canadian market because of the regulatory changes.
Ohio Pushes for Crypto Tax Payments
While crypto exchanges are exiting the Canadian market, there are other places that are much more open to embracing crypto. An Ohio state senator, Niraj Antani, introduced a bill that will require the state to accept cryptocurrency for the payment of taxes and fees.
The legislation was introduced on Sept. 30, and will also allow state institutions of higher education and the state pension fund to invest in cryptocurrency if they want to do so. Under the bill, the state tax commissioner will decide by June 30 each year which cryptocurrencies could be used for these payments.
Additionally, governmental entities may charge service fees associated with cryptocurrency transactions. However, the bill explicitly excludes central bank digital currencies (CBDCs) from being treated as cryptocurrency.
The proposal specifically defines cryptocurrency as a digital representation of value that is expected to maintain a stable value relative to a fixed amount of monetary value, which may limit the tax commissioner’s options a bit.
This bill was proposed as Ohio is exploring crypto regulation at the state level. A separate bill currently before the Ohio House plans to exclude CBDCs from being recognized as money under the Ohio Uniform Commercial Code. Another bill provides protections for the crypto mining industry.
Ohio has a history with crypto acceptance, and even became the first state to accept cryptocurrency for tax payments in 2018. However, this initiative was stopped when the state attorney general advised that the State Board of Deposits needed to approve the use of crypto, which it never did.
Antani is very disappointed by the fact that the board did not act on this policy and stated that the legislature will now take all of the necessary steps.
California Governor Blocks AI Regulation Bill
Meanwhile, California Governor Gavin Newsom decided to veto a controversial artificial intelligence (AI) bill, SB 1047, which proposed mandatory safety testing and other guardrails for AI models. The bill is known as the Safe and Secure Innovation for Frontier Artificial Intelligence Models Act, and it faced a lot of opposition from Silicon Valley where many tech companies warned it could stifle innovation.
In his veto statement, Newsom argued that the bill focused too much on existing AI firms and imposed overly stringent standards on basic AI functions, yet still fails to address the real threats posed by emerging technology.
A quote from Newsom’s statement (Source: Gavin Newsom)
The bill was penned by Democratic Senator Scott Wiener, and would have required developers, including companies like OpenAI, Meta, and Google, to implement a "kill switch" for their AI models and publish risk mitigation plans. It also would have allowed the state attorney general to sue developers if their models posed an ongoing threat, like an AI grid takeover.
Although Newsom vetoed the bill, he still believes there is a need for AI safety protocols and stated that waiting for a major catastrophe before taking action would be very irresponsible. He asked AI safety experts to help develop science-based guidelines and directed state agencies to expand their risk assessments of potential catastrophic AI events. Newsom also shared that his administration already signed more than 18 bills related to AI regulation in the past 30 days.
The vetoed bill received a lot of pushback from lawmakers and tech firms, including former House Speaker Nancy Pelosi and OpenAI, who warned it will hinder AI growth. Critics like Neil Chilson of the Abundance Institute also expressed their concerns that the bill’s scope, which targeted AI models costing over $100 million, could eventually extend to smaller developers.
On the other hand, some people like Elon Musk, supported the bill. Musk is advocating for stronger AI regulations and suggested California should pass SB 1047 despite acknowledging it was a difficult decision.
Kasikornbank Expands Crypto Services
It is not just the US broadening its horizons with crypto. Kasikornbank (KBank), which is Thailand's second-largest bank by assets, announced the launch of orbix Custodian, the country's first licensed digital asset custodian.
The license was granted by the Ministry of Finance on Sept. 13, and allows orbix Custodian to operate under the supervision of the Securities and Exchange Commission (SEC). Orbix Custodian is expected to start operations in early 2025. It is owned by KBank through its digital-focused subsidiary Unita Capital, which also manages orbix Invest and orbix Technology.
This move is part of a broader strategy by KBank to strengthen its presence in the digital asset space. KBank President Pipit Aneaknithi shared that the launch of the custody service will support Thailand’s goal of becoming a digital economy hub and advancing its digital financial infrastructure.
Some of KBank's digital initiatives included the rebranding of the crypto exchange Satang as orbix Trade after its acquisition in October of 2023 and the launch of the Q-Bond project, which issued 500 million baht ($15.4 million) in bonds on the Quarix blockchain. In addition, orbix Invest, which is a digital asset fund manager, launched in July. Also, orbix Reward, which is a customer loyalty program, was introduced in September.
KBank's digital subsidiary, Kasikorn Business Technology Group (KBTG), is also involved in artificial intelligence development through its participation in Project SEALD. This is a collaboration with AI Singapore and Google Research to create large language models (LLMs) for Southeast Asian languages.
