In the wake of the FTX crash and subsequent contagion, Canadian authorities have taken steps to further safeguard Canadian cryptocurrency investors. On December 13th, the Canadian Securities Administrators (CSA), a council of provincial and territorial securities regulators in Canada, released new guidance for crypto trading platforms in the country.
According to the CSA, new measures have been taken to strengthen the regulatory framework for cryptocurrency exchanges. The statement claims that all crypto trading companies in Canada, both domestic and international, must adhere to the updated rules, which prohibit them from providing margin or leverage trading services to any Canadian clients.
The amended rules also stipulate that Canadian crypto exchange service providers separate custody assets from the platform’s proprietary business. The CSA said that custodians would generally be regarded as qualified if they are subject to “a supervisory regime for conduct and financial regulation” in either Canada or the United States.
Investors are strongly encouraged to only use a platform registered with CSA members, as the council underlined that despite these precautions, crypto assets and related financial instruments remain high-risk investments.
The Canadian Securities Administrators (CSA) referenced its previous statement to Canadian crypto exchanges, dated August 15, 2022. Pre-registration undertakings are anticipated from unregistered Canadian crypto trading sites as they pursue registration, as indicated by the authority.
The CSA’s message followed FTX’s June 2022 deal to acquire Bitvo, a Canadian cryptocurrency platform. FTX’s original intent with the purchase was to use it to launch a global expansion. However, Bitvo was able to cancel its acquisition by the now-defunct FTX, allowing it to continue operations after the exchange went bankrupt.
In November, Pamela Draper, CEO of Bitvo, stated that the deal had not finished because the companies were still trying to satisfy the closing criteria, the most important of which was regulatory approval from the Alberta Securities Commission.