Key takeaways:
On December 13, the Canadian Securities Administrators (CSA) updated the country’s crypto trading platforms.
Following the collapse of FTX, Canada’s securities regulators intend to tighten up regulation of the cryptocurrency industry.
Canadian regulatory authorities have officially confirmed a synchronised supervisory system in the wake of the unfortunate collapse of one of the world’s largest cryptocurrency exchange FTX.
All cryptocurrency trading platforms seeking registration will be required to sign commitments to abide by investor safeguards before they are officially placed under legislative monitoring, according to a coordinated supervisory framework proposed by Canadian officials.
In order to be registered in Canada, cryptocurrency platforms will need to accept stricter regulations, which include a prohibition on margin and leverage trading.
According to a statement released by the CSA on Monday, cryptocurrency trading platforms will also be obliged to hold the funds of Canadian customers with an “appropriate” licenced custodian. If a custodian is subject to regulation in the US, Canada, or another comparable country, they are regarded as certified.
The applicability of the additional terms and policies to the listed crypto trading platforms will be discussed by CSA representatives with each platform separately. In the future, the CSA will release more information regarding this revised strategy.
Consultation on cryptocurrency and stablecoin was recently announced in Canada’s new budget proposal. The CSA also keeps track of and evaluates the status and function of stablecoins in Canadian financial markets, as stated in its business strategy.
The CSA believes that stablecoins, or stablecoin arrangements, may qualify as securities and/or derivatives as a product of this active investigation.The CSA officials also issued a warning to cryptocurrency exchanges not to support any cryptocurrency that can be regarded as a security, which could include stablecoins.
The auditors made it explicit that for the interests of securities legislation, platforms accessible to Canadians that are based beyond Canada will be treated as operational in Canada.
Before FTX’s demise in November, in mid-August, the CSA, which was established to manage supervision among a network of regional watchdog groups around the nation, announced early plans to strengthen monitoring of crypto operations in this country.
According to Jacob Robinson, a lawyer at the Canadian law firm McCarthy Tétrault, the proposed regulations may have a significant effect on local cryptocurrency exchanges.
According to Robinson, “This categorisation could result in a significant delisting of [stablecoins] on Canadian exchanges. The closest thing to a firm declaration we’ve seen is about stablecoins as securities or derivatives.”
