Legislative authorities in Canada have taken adequate protective measures to halt the spread of the ongoing contagion owing to the aftermath of the world’s largest crypto exchange, FTX.
On Tuesday, the council of Canada’s Provincial and Territorial Securities Regulators (CPTSR) and Canadian Securities Administrators (CSA) issued an update on its final decision regarding crypto firms operating across the country.
According to the CSA, Canadian Authorities have been enforcing updated approaches to regulate and supervise crypto trading firms by modifying existing requirements. Thus, all firms running crypto trading activities, both local and international, would adhere to the modified regulations.
One of Canada’s crypto regulatory modifications is that the authorities have banned all crypto platforms from carrying out margin or leverage trading services to Canadian residents. In addition, the newly modified regulations require providers of crypto exchange services in the country to set apart funds owned by clients from the firm’s proprietary business.
The CSA further stated that considerations on custodians’ eligibility would be judged by bodies regulating them. Therefore, according to the CSA statement, these crypto exchanges must be regulated by financial regulators in Canada, the United States, or a similar legal entity with supervisory power.
Furthermore, the authorities emphasized that even with adopting these regulations, financial services offered using the framework of crypto assets are high-risk investments. Hence, they urged investors to conduct business with firms with a seal of approval from the CSA.
Crypto Trading Firms’ Registration Is Mandatory
The CSA also highlighted its previous conversation with Canada-based crypto firms offering margin and leverage trading services.
Meanwhile, the Council of Legislative Authority stated that unregistered crypto trading platforms could continue their operations in Canada, provided they’ve completed their pre-registration process.
The updated crypto regulations came shortly after the now-collapsed crypto exchange, FTX, reached an agreement to purchase the Canadian crypto exchange platform, Bitvo in June 2022.
FTX intended to use the acquisition to expand its services to the North American nation. However, the Bitvo acquisition wasn’t successful due to various reasons.
Otherwise, the exchange would also have been affected by the now-insolvent exchange. As such, the firm has continued operating even while platforms exposed to the FTX collapse are filing for bankruptcy.
Pamela Draper, CEO of Bitvo, explained that the acquisition didn’t happen because both firms couldn’t satisfy all the closing conditions. One of these conditions was approval from the Alberta Securities Commission.