Canadian regulators have set strict guidelines requiring all cryptocurrency trading platforms (CTPs) to become full members of the Canadian Investment Regulatory Organization (CIRO) by a specified time. All CTPs must complete applications in accordance with the Investment Dealer Standards. This requirement will help ensure better compliance with the law and protect investors in the cryptocurrency space.
Stricter Regulations for Canadian Cryptocurrency Trading Platforms
The Canadian Securities Regulator (CSA) issued a notice to the CTPs, reminding them of the importance of complying with the prescribed deadlines without delay. At the end of the transition period, platforms will need to demonstrate the progress of their membership applications. In addition, new CTPs will not receive the grace period required to obtain CIRO membership.
In addition, each platform must be registered in the specific Canadian jurisdiction in which it serves. This decision ensures a harmonized approach to managing crypto-assets in Canada, as crypto-assets will be available across the country. Canadian cryptocurrency exchange Coinsquare is an example of compliance as it applied for CIRO membership at the end of 2020.
Efforts of Major International Exchanges in Canada
The CSA has gradually raised its standards, especially after many events in the cryptocurrency market. The latest changes in its regulations mainly involve measures to protect customers and ensure the stable development of digital assets.
“CSA’s focus is on ensuring that all platforms are ethical and honest,” a CSA spokesperson said.
Due to these strict measures, some international cryptocurrency exchanges, such as Kraken and Gemini, have had to fast track their compliance measures. On the other hand, some companies, such as OKX and Binance, have decided to exit the Canadian market entirely. Globally, this is an overall trend towards increased regulation in the cryptocurrency space.
Future of Cryptocurrency Regulation in Canada
The CSA said it would soon expand the scope of its guidelines for investment firms dealing with cryptocurrencies. This expanded functionality will likely include stricter crypto asset management and disclosure guidelines. Since its launch, Canada has been one of the most active countries in incorporating Bitcoin into regulated financial products like the Spot Bitcoin ETF in 2021.