The Canadian Securities Authority (CSA) has published a notice that provides additional obligations to ensure investor protection for crypto asset trading platforms (CTP) operating in this country.
This notice is an addition to the set of regulatory norms published in December last year regulating the processes related to the use of crypto assets.
Additional obligations are assumed in the form of an extended pre-registration obligation, which CTP must provide in order to be able to continue working in Canada when considering their applications for registration with local securities regulatory authorities.
Stan Magidson, head of the CSA and chairman and CEO of the Alberta Securities Commission, says that the recent bankruptcies of large crypto platforms are confirmation that there are significant risks in this area. He also noted that the risk of asset loss increases in the case of interaction with platforms that are not registered in the regulatory control space.
Unregistered CTPs that continue to operate in Canada must provide the main regulatory authority with extended pre-registration obligations within 30 days from the date of publication of the notification.
Pre-registration obligations include increased expectations regarding the storage and segregation of crypto assets held on behalf of Canadian customers, and a ban on offering margin, credit, or other forms of leverage to any Canadian user. CTP will also not be able to allow customers to purchase or deposit value-linked crypto assets and proprietary tokens without first obtaining written consent from the CSA.
If the platform does not provide extended pre-registration conditions, the regulator will impose restrictions that make it impossible for Canadian users to access its products or services.
The CSA urges Canadians to remember that the process of trading assets stored in cryptocurrency contains many risks and represents a dangerous space for retail investors. The regulator also designates trading in crypto assets as speculative activity and focuses on the fact that the cost and liquidity in this industry are not characterized by stability.
Investors are advised to familiarize themselves with the list of platforms registered with the CSA and study the basics of crypto assets before directing their financial resources to this area. The regulator directs its efforts to ensure that the control of the Canadian capital market is as effective as possible.
As we have reported earlier, Canada’s real-time payments system is on hold.