Regulatory agencies in Canada have issued a directive for the entities engaged in crypto trading to go through additional pre-licensing to get registered.
The latest modifications take into account a ban on offering credit, margin, as well as the rest of the kinds of leverage. The authorities in the country are, at present, taking crucial measures to deal with the regulation of cryptocurrencies.
Canada-based Regulatory Agencies Unveil Exclusive Rules for Unlicensed Crypto Companies
The Ontario Securities Commission of Canada has issued a notice mentioning that the agency had fortified the administration of the platforms involved in crypto trading in the jurisdiction. The notice discloses the investor protection pledges expected from the crypto asset trading platforms (CTPs) running in the country.
The agency particularly points toward several bankruptcies that occurred during the recent 12 months. They take into account Voyager Digital, FTX, and other such platforms, which have additionally occupied a significant place across the mainstream media.
In this way, the Canadian authorities intend to implement several regulations to guarantee that such events do not take place again.
The platforms offering services related to crypto trading will require accomplishing an expanded pre-registration procedure within thirty days following the issuance of the notice.
The regulatory agency’s press release of February 22 reveals that the CTPs will not require stopping their operations in Canada. However, those applying for a license to operate as legitimate entities must comply with the new regulations.
In the press release, it was also mentioned that the pre-registration undertaking also takes into account a prohibition on CTPs from letting consumers deposit or buy value-referenced cryptocurrencies (normally known as stablecoins).
They will additionally be banned from allowing the users to purchase proprietary tokens in advance of prior consent from the Canadian Securities Administrators (CSA) in written form.
Crypto Trading Firms Are Now Banned from Offering Stablecoin Deposits or Purchases Without a Written Consent
The attention given to stablecoins counts as something that authorities across the globe are emphasizing. In this respect, Canada started its endeavors for the regulation of stablecoins in the year 2022 when it declared a stablecoin and crypto consultation in the country’s budget statement.
It was assured that the regulatory agendas must not hinder financial innovations.
On the other hand, the CTPs which are unwilling or incapable of going through a comprehensive pre-registration procedure will likely witness adequate actions taken by the CSA against them.
The agency will attempt to off-boarding the remaining Canadian customers of the respective entities to prevent them from accessing the services and products offered by those platforms.
Stan Magidson, Alberta Securities Commission’s CEO, and the CSA’s chairman, stated that the previous insolvencies around the crypto industry brought to the front the huge risks involved in this market, specifically in the case of the unregistered entities that are not based in Canada.
The regulator asserted the hazards involved in crypto trading, especially for retail investors.
As per OSC, it is highly speculative to invest in crypto assets, while the liquidity and value of these assets are very volatile. The organization persuaded the crypto entities to get registered with the agency.
It additionally advised the investors to learn about the basics of cryptocurrencies in advance of making any investment-related decisions. Though an important role is played by regulatory oversight to protect the investors, OSC added, such actions cannot eradicate all the hazards associated with trading in cryptocurrencies.
