Canadian authorities are taking extra measures to protect cryptocurrency investors following FTX’s implosion and its attendant impact. The Canadian Securities Administrators (CSA) issued an update on Dec. 12, claiming it was an attempt to “strengthen its approach to oversight of crypto trading platforms by expanding existing requirements for platform operating in the region.”
Accordingly, all crypto trading firms (local and foreign) operating in Canada will be subject to the newly expanded terms, including a provision outlawing margin or leverage trading services to any Canadian clients. Furthermore, these terms will also require that crypto exchanges in Canada separate customers’ assets in their custody from their proprietary businesses— this requirement is predicated on the FTX’s incident, where the exchange commingled customers’ funds to conduct its trading business.
“Custodians will generally be considered qualified if they are regulated by a financial regulator in Canada, the U.S., or a similar jurisdiction with a supervisory regime for conduct and financial regulation.”
The CSA also hammered on the volatility of crypto assets, noting that they are high-risk investments while urging investors in the county to invest using a platform registered with CSA members.
In addition, referencing a previous statement issued on Aug. 15, 2022, the CSA mentioned in the new update that it expected commitments from unregistered crypto trading platforms operating in the country while the pursued pre-registration undertaking (PRUs). Given the undertaking, regulators will communicate a deadline by which all PRUs must be delivered.
Meanwhile, as facts surrounding FTX’s collapse continue to come to light, the now-defunct exchange had planned to expand operations into Canada by acquiring the Canadian crypto platform Bitvo in June 2022. However, the acquisition fell through, with Bitvo CEO Pamela noting in a November interview that both firms couldn’t satisfy the closing conditions— obtaining regulatory approval from the Alberta Securities Commission.
Read also;
