Cryptocurrency companies in Canada and those planning to operate in the country have 30 days to meet updated crypto registration guidelines that were released on Wednesday, or risk losing their Canadian users.
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Fast facts
- The Canadian Securities Administrators (CSA) said in a press release that crypto companies planning to operate in Canada must undertake a pre-registration process within 30 days to initiate their full registration and comply with the guidelines.
- In the pre-registration process, crypto asset trading platforms will have to conform to custody rules, which include segregating crypto assets held for local clients, restricting margin and leveraged trading, and ceasing the sale of stablecoins without the CSA’s permission.
- The crackdown on stablecoins by Canadian regulators began last year when the CSA said such digital assets may constitute “securities and/or derivatives” and required exchanges to obtain licensing for their sale.
- According to the official notice, the pre-registration undertaking will include additional commitments from crypto asset trading platforms to hold assets, including cash, securities, and crypto assets that are not securities, of a Canadian client.
- “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 Stan Magidson, CSA chair and CEO of the Alberta Securities Commission.
- Companies have to publish their revised pre-registration undertaking, which may end up posted on the CSA’s website. Companies that cannot or will not comply are “expected” to offload Canadian users and block the jurisdiction.
See related article: Canada to examine risks from crypto, stablecoins, CBDCs in budget
