Canadian securities regulators plan to get tough on unregistered crypto-trading platforms. The Ontario Securities Commission gives the companies three weeks to comply with its guidelines before action is taken against them.
The Canadian Securities Administrators (CSA) and the Investment Industry Regulatory Organization of Canada (IIROC) released a document on Monday detailing securities law requirements that have relevance to crypto-asset trading platforms (CTPs) and ways regulators can customize them for the CTPs business system.
The platforms involved in digital trading tokens or crypto assets are expected to act swiftly to bring themselves into compliance with Ontario securities law. They must also become IIROC members or apply for interim registration to transition to a long-term regulatory framework.
Unregistered Trading Platforms
The announcements from the Canadian Securities Administrators and the Investment Industry Regulatory Organization of Canada come a few days after Logic reported there are now over 600 unlisted companies with securities regulators that offer cryptocurrency-trading services in Canada. Even though some may not be required to register and at least 11 who have not registered with the Financial Transactions and Reports Analysis Centre of Canada, there is no proof that they have faced fines from Canadian authorities.
The guidelines are expected to show how the current rules may be customized to encompass crypto-asset trading platforms rather than introduce new rules precisely machined toward them.
According to the agencies, the regulations should balance the adaptability required to nurture innovation in Canada’s capital markets with protecting investors and providing fairness and coherence.
Guiding Operators into Compliance
Louis Morisset, President and, CEO of the Autorité des marchés financiers noted that the guidance in their notice has detailed procedures that platform operators must comply with securities legislation as they prepare to blend into the Canadian regulatory structure thoroughly. He added that CTPs should consult their local securities regulator to discuss the registration procedure and address applicable requirements to comply with their operations.
Andrew J. Kriegler, President and CEO of, IIROC said that they are excited to work with the CSA on such a significant initiative. He added that the framework guides how the regulatory requirements may be tailored to a platform’s business without interfering with investor protection or market integrity.
Victoria Pinnington, IIROC’s Senior Vice-President, Market Regulation, also said that they must continue establishing how they regulate to support innovation – all while ensuring investors are protected. IIROC will continue assessing how their regulatory requirements might be best tailored for crypto assets.
Last month, cryptocurrency-based exchange-traded funds (ETFs) surfaced in Canada from Galaxy Digital Capital Management, a subsidiary of the financial services and investment management company Galaxy Digital.