Authorities in Canada are taking steps to better protect Canadian cryptocurrency investors following the collapse of FTX and the spread of the contagion.
The Canadian Securities Administration (CSA), the council of Canada’s provincial and territorial securities regulators, issued an update for cryptocurrency trading platforms operating in the country on December 13.
The CSA said that the authority has been strengthening its approach to oversight of crypto trading platforms by expanding existing requirements.
According to the statement, all cryptocurrency trading companies operating in Canada — both local and foreign — are required to abide by the new expanded terms, which prohibit them from offering margin or leveraged trading services to any Canadian client.
The expanded terms also require Canadian cryptocurrency exchange service providers to segregate custodial assets from the platform’s own business.
“Custodians will generally be considered qualified if they are regulated by a financial regulator in Canada, the US, or a similar jurisdiction with a financial regulatory and conduct oversight regime.”the CSA said in the statement.
The council stressed that even with the adoption of these measures, crypto assets or any financial products related to crypto assets are high-risk investments, urging investors to invest only using a platform that is registered with CSA members. .
The CSA did not immediately respond to Cointelegraph’s request for comment.
In the new statement, the CSA mentioned its previous communication to cryptocurrency trading platforms operating in Canada, issued on August 15, 2022. The authority stated that it expected commitments from unregistered cryptocurrency trading platforms operating in Canada as they pursue registration in the form of a pre-registration commitment.
The communication from the CSA came shortly after FTX reached an agreement to buy Canadian cryptocurrency platform Bitvo in June 2022. FTX originally planned to use the acquisition as part of its global expansion plans. However, Bitvo eventually managed to rescind the takeover by the now-defunct exchange, allowing the firm to continue operating even after FTX collapsed.
Bitvo CEO Pamela Draper told Cointelegraph in November that the acquisition was not completed because the companies were working to satisfy closing conditions, the most important of which was regulatory approval from the Alberta Securities and Exchange Commission.
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