Bitcoin coins with Canada Flag

Canada introduces new pre-registration filing for unlicensed digital asset firms

Getting your Trinity Audio player ready...

The Canadian Securities Administrators (CSA), which comprises all individual securities regulators in Canada, has introduced a new requirement for the operation of digital asset platforms. The CSA says that digital assets trading platforms are expected to file a “pre-registration undertaking” while their application for licenses is under review.

In a press statement, CSA said the undertaking stipulates that the platforms consent to comply with terms and conditions that address investor protection concerns. This is also currently applicable to already registered platforms.

The statement added that digital assets firms that are the target of the guideline are already complying with the requirement. Two firms, including Crypto.com and Coinsquare Capital Markets Ltd., have filed their pre-registration undertakings with the Ontario Securities Commission (OSC).

Regulators who are also members of the CSA are in talks with other platforms about their filing. When these filings are made, the names of the firms will be updated on the CSA’s website, which also maintains a list of all registered platforms.

Where any platform fails to comply with the new requirement, CSA members can take action against the firm, the release noted.

“CSA members may take action if a crypto trading platform is not prepared to file an undertaking or does not abide by the terms of an undertaking,” the CSA said.

The requirement is expected to bolster the securities law guidance released by the CSA and the Investment Industry Regular Organization of Canada (IIROC) in March 2021. The guidelines spelled out an “interim approach” for the regulators.

Canada ramping up digital assets regulatory clarity

Crypto.com said in a statement that its signing of the undertaking with the OSC makes it the first global digital asset platform to be operating in line with the regulatory requirements in Canada at present.

The exchange added that the filing builds on its regulatory approval from the Financial Transactions and Reports Analysis Centre of Canada (FINTRAC) and the Autorité des marchés financiers (AMF) of Quebec.

The requirement comes after the CSA established a new Investor Advisory Panel (IAP) with several members with backgrounds in digital assets regulations, as reported by Bloomberg.

Previously, the CSA published guidance for digital assets firms to follow in advertising their products and services and using social media. The guidance mainly flags some marketing practices as irresponsible as they encourage investors to engage in risky trading behavior.

Watch: The BSV Global Blockchain Convention panel, Blockchain for Government Data & Applications

https://www.youtube.com/watch?v=ggbZ8YedpBE&t=30603s

New to blockchain? Check out CoinGeek’s Blockchain for Beginners section, the ultimate resource guide to learn more about blockchain technology.