Matthew T. Burgoyne
Apr 17, 2023
Unregistered cryptocurrency trading companies operating in Canada had 30 days to commit to a pre-registration undertaking after Canadian securities regulators announced a deadline in February 2023. The tougher regulations, which mirror the recent uptick in U.S. regulatory action, require companies to segregate customer asset classes and stop companies from offering margin or leverage to users.
“It’s a reaction to recent events and lessons learned from those events,” said Matt Burgoyne, Co-Chair of Osler’s Digital Assets and Blockchain practice.
Canadian regulators first proposed a broad framework for cryptocurrency platforms in 2019 and followed up with a 2021 notice from securities regulators and the Investment Industry Regulatory Organization of Canada outlined how securities law applies to these businesses, says Matt.
Matt asserts that the Canadian government is not trying to drive away business but is instead “trying to allow crypto trading platforms to stay in Canada and operate, but just be subject to some disclosure requirements and rules and regulations that protect users from insolvency risks, fraud risks and hacking risks.”
Several companies have indicated they will exit the Canadian market while others have shared that they are filing their registration. Matt says regulators should engage with industry to better understand the issues that companies are having.
Read the full article by Yueqi Yang and Allyson Versprille published by Bloomberg News and picked up by several media organizations.