The Canadian Securities Administrators (CSA), the council of provincial and territorial securities regulators, announced Monday that cryptocurrency trading platforms will be required to submit a pre-registration commitment to their major regulators as they take steps to fully comply with securities regulation. Two platforms, Crypto.com and Canada’s Coinsquare Capital Markets, have already submitted such commitments.
Trading platforms are expected to commit to comply with conditions relating to investor protection. The commitment statement will allow cryptocurrency trading platforms to continue operating during the review of their registration applications with the CSA. The new commitment is part of the “interim approach” introduced in the guidance on securities law requirements for cryptocurrency trading platforms published in March 2021 by the CSA and the Investment Industry Regulatory Organization of Canada ( IIROC).
Crypto.com and Coinsquare Capital Markets have filed commitments with the Ontario Securities Commission, which is their main regulator. The CSA said in its announcement that it was in discussion with other platforms about the compromise.
Cryptocurrency trading platforms in Canada face long waits for registration. They may obtain “restricted dealer” status before receiving full registration. Platforms that have applied to be restricted distributors still have to submit the newly instituted pledge.
Crypto.com noted in a statement that it is already regulated in Canada by the Financial Transactions and Reporting Analysis Center of Canada (FINTRAC) and the Autorité des marchés financiers (AMF) of Quebec. Crypto.com CEO Kris Marszalek said in the statement that:
“The North American market, and Canada in particular, represent a significant area of potential growth for the cryptocurrency market.”
The CSA indicated that member organizations could “take action” against platforms that do not submit a pledge.
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