Lynn Johannson, Advisor, Sustainability and ESG
January 4th, 2024
Lynn Johannson, President of E2 Management Corporation and Catalyst for THE Collaboration
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Canadian Securities Regulators Expect Crypto Trading Platforms to Complete Pre-Registration Step
CSA | Release | Aug 15, 2022
TORONTO – The Canadian Securities Administrators (CSA) is providing an important update to crypto trading platforms that continue to operate in Canada while they take steps to comply with applicable securities legislation.
CSA members now expect such platforms to provide a pre-registration undertaking to their principal regulator to continue operations while their application is reviewed. By giving these undertakings, crypto trading platforms agree to comply with terms and conditions that address investor protection concerns and are consistent with requirements currently applicable to registered platforms.
The Ontario Securities Commission today published the first pre-registration undertakings, filed by Coinsquare Capital Markets Ltd. and Crypto.com. CSA members are in discussions with other crypto trading platforms about providing pre-registration undertakings. Once provided, these undertakings will be published on the CSA’s website.
See: CSA Regulatory Sandbox / Crypto Asset Trading Platform Decisions
CSA members may take action if a crypto trading platform is not prepared to file an undertaking or does not abide by the terms of an undertaking.
On March 29, 2021, the CSA and the Investment Industry Regulatory Organization of Canada published a notice outlining securities law requirements that apply to crypto trading platforms.
All crypto trading platforms that are registered in Canada or that have provided a pre-registration undertaking to a CSA member are listed on the CSA’s website.
View the original release --> here
McCarthy Tetrault | Lori Stein and Rene Sorell| Aug 16, 2022
Select Analysis on Initial Pre-registration Undertakings by Coinsquare and Crypto.com
- Coinsquare and Crypto.com agree to adopt policies and procedures to ensure that their advertising and social media use is fair, balanced and not misleading, having regard to CSA guidance and federal government guidance under the Competition Act. Registered CTPs are subject to such CSA and federal government guidance by virtue of their registrations.
- Coinsquare and Crypto.com are prohibited from offering staking or lending services to Canadian clients without regulatory consent. Registered CTPs are not expressly prohibited from offering staking, but all registrants other than IIROC members are prohibited from lending money, extending credit or providing margin to clients, subject to certain limited exceptions. In addition, the CTP Orders include conditions which restrict each CTP’s business activities to spot crypto asset trading and custody services, and oblige the CTP to obtain regulatory approval for any expansion in the scope of its business activities.
See: A Global Review Of The Regulatory Considerations Relating To Crypto-Asset Trading Platforms
- Coinsquare and Crypto.com are not required to de-list a crypto asset based on a determination made by a court or securities regulator in Canada or the foreign jurisdiction with which the crypto asset has the most significant connection that the crypto asset is a security or derivative, or upon becoming aware of the view of a regulator that the crypto asset is a security or derivative. Registered CTPs have accepted this requirement as a condition of registration. However, like Registered CTPs, Coinsquare and Crypto.com may not list a crypto asset that is a security or derivative based on an internal review by the platform, or a crypto asset which is issued by or on behalf of a person or company that has been subject to an order, sanction, or administrative penalty relating to fraud, violation of anti-money laundering laws, violation of securities laws, or similar conduct in specified jurisdictions, including the United States, the United Kingdom and the member states of the European Union.
- The definition of “Specified Crypto Assets” in the undertakings includes Bitcoin, Ether, Litecoin, Bitcoin Cash and any other Crypto Asset that has been designated in writing by the CSA as a Specific Crypto Asset for the purposes of the undertaking [paraphrase]. In all jurisdictions other than Alberta, British Columbia, Manitoba and Quebec (the “Investment Limit Jurisdictions”), Registered CTPs that are exempt from the suitability obligation may sell a maximum of C$30,000 worth of crypto assets other than Specified Crypto Assets to a client in any 12 month period.
- In the Investment Limit Jurisdictions, Coinsquare’s undertaking limits a client’s investments in crypto assets other than Specified Crypto Assets in any 12 month period to C$30,000 for clients that do not qualify as “eligible crypto investors”, C$100,000 for clients that qualify as “eligible crypto investors” and unlimited for clients that qualify as “accredited crypto investors”.
Continue to the full article --> here
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