Canadian Regulators Set New Rules for Unregistered Crypto Platforms

Canadian regulators have ordered that crypto trading platforms go through enhanced pre-registration in their pursuit to register. The changes include a prohibition on offering margin, credit, or other forms of leverage.

Authorities in Canada are making moves with respect to crypto regulations. The Ontario Securities Commission has published a notice stating that it had strengthened oversight of crypto trading platforms in the country.

The notice describes “investor protection commitments it expects from crypto asset trading platforms (CTPs) operating in Canada.” It specifically refers to the multiple bankruptcies that have taken place over the past 12 months. These include the likes of FTX and Voyager Digital, which have also made headlines in mainstream media.

As such, the authorities in Canada want to impose checks and balances to ensure that such incidents do not occur again. Crypto trading platforms pursuing registration will have to provide “enhanced pre-registration” within 30 days of February 2022, when the notice was published.

The enhanced pre-registration requirements include information about the custody and segregation of crypto assets held on behalf of Canadian clients. Perhaps more importantly, it prohibits offering Canadians margin, credit, or any other form of leverage.

Stablecoins are also a part of the new rules. Crypto trading platforms will not be able to allow the purchase or deposit of stablecoins without written consent. This includes proprietary tokens as well.

Canada Revealed Crypto Trading Regulatory Focus Last Year

The focus on stablecoins is something that governments the world over are also doing. Canada last year revealed a foray into stablecoin regulations when it announced a crypto and stablecoin consultation in its budget statement. It remarked that regulatory frameworks would have to keep pace with financial innovations.

Stablecoins are a major pain point for governments, who take issue with the fact that they may challenge and pose risks to fiat currencies. As such, they are conducting reviews of the niche to see what the challenges and opportunities are.

Canadian Regulators Make Headway With Regulations

Canada has picked up the pace when it comes to regulations, keeping true to its intentions declared in the budget statement. For example, the decision to ban leverage trading was first revealed in December 2022.

The changes in regulations have led to major platforms adjusting their offerings. CRYPTO.COM delisted in Canada to comply with the updated stablecoin regulations. More such changes may soon be put in place as Canada focuses on imposing controls following incidents like the collapse of FTX