Canada has given crypto platforms a 30-day deadline to register
As part of Canada’s efforts to protect investors after the market was seriously shaken by sudden bankruptcies in 2022. The Canadian regulator, the Canadian Securities Administrators (CSA), is placing special emphasis on safeguarding investors' interests.
The Canadian regulator, CSA, has stepped up its oversight of cryptocurrency trading platforms operating in the country. Last year, in August, the CSA required digital asset trading platforms to provide a commitment to pre-registration (PRU), as an agreement to comply with the extended requirements for registered companies.
As part of its ongoing efforts to ensure investor protection, the CSA issued a reminder about PRU in December and followed it up with a notification on February 22nd, requiring all unregistered platforms to undergo an extended pre-registration process with their main regulatory body within the next 30 days.
Recent insolvencies involving several crypto asset trading platforms highlight the tremendous risks associated with trading crypto assets, particularly when conducted on unregistered platforms based outside of Canada, said Sten Madjidson, the head of CSA.
The extended requirements for cryptocurrency platforms, which the regulator insists upon, include:
• Storage of Canadian users' crypto assets with qualified custodians. According to CSA, qualified custodians are those that are regulated by financial regulators in Canada, the United States, or a similar jurisdiction with behavioral and financial regulation oversight.
• Segregation of Canadian users' assets from corporate assets of the platforms.
• Prohibition on margin trading.
• Prohibition on purchasing or introducing stablecoins without prior written consent from CSA.
If a cryptocurrency platform that offers services to Canadian investors does not complete extended pre-registration within the 30-day period, the Canadian Securities Administrator will block access to its products and services in the country.
