Canadian regulators much like the other regulators across the globe, are becoming cautious of the regulatory situations in the current times.
In a recent notification, Canadian Securities Administration (CSA), an umbrella organization of Canada’s provincial and territorial securities regulators whose objective is to improve, coordinate, and harmonize regulation of the Canadian capital markets, has released an advisory for all the crypto trading platforms.
The notification mandates all crypto platforms that are seeking registration to sign an undertaking to adhere to investor protections before they come under the jurisdiction of formal regulatory surveillance. The guidelines have come from the regulatory agency following the collapse of FTX.
As per the notification, CSA officials have ensured that the crypto regulation has already been strengthened by expanding the reach to crypto firms and their compliance. The CSA said:
“Following recent events in the crypto market, the CSA is strengthening its approach to oversight of crypto trading platforms by expanding existing requirements for platforms operating in Canada.”
Via this announcement, the regulator has revealed its intention to expand the existing terms and conditions for crypto platforms that are operating in the country.
CSA not only intends to rigidify its grip within the country but will also work on the licensing policies. The licensing would be made stricter for all the crypto firms including those based outside the country but are accessible to Canadian citizens.
The undertaking as mentioned by the regulator for the crypto companies includes a pledge that the Canadian client’s asset shall be held with a proper custodian, alongside, these assets have to be kept separate from the platform’s proprietary business.
Further, the regulator doesn’t allow the crypto platforms to offer margin or leverage for their clients in Canada.
If the pre-registration undertaking is not offered by the principal regulator within a deadline to be determined or if the platform has not closed all its operations in the country, then strict enforcement acts would be sanctioned on them. CSA states that in such a case “all applicable regulatory options that could bring the platform to compliance with securities laws, including enforcement would be considered.”
CSA was formed with an aim to harmonize and coordinate regulation among the existing regulators across Canada. In mid-August this year, it also announced certain preliminary plans to improve the regulation of crypto operators in the country.
In November, before the collapse of FTX, it announced that it wanted the unregistered crypto platforms in Canada that are waiting for the approval to undergo a pre-registration undertaking (PRU).
Additionally, it also stated that:
“Canadian investors are urged to exercise caution and consider seeking advice from a registered investment advisor before investing in crypto.”
CSA also suggested that it considers stablecoins “securities and/or derivatives,” which are banned and traders are not allowed to trade or even exposed to such crypto assets via registered on pre-registered platforms.
In November, Chrystia Freeland, the Deputy prime minister of the country, in the mini-budget statement, revealed the country’s plan in the digital assets sector under the section titled “Addressing the digitization of Money.”
However, Canadian regulators are not the only authority concerned about the regulation of the sector. On December 13, Todayq News reported that the Thai Securities and Exchange Commission (SEC) is getting ready to establish stricter laws on digital assets that will parallel those on the international market.