Canadian Securities Administrators (CSA) will tighten requirements for cryptocurrency exchanges operating in the country by the end of this month, according to two people with knowledge of the plans.
The failure of FTX, among other failings in the crypto industry, has accelerated the CSA’s resolve, which announced in the middle of last year that it required certain compliance “commitments” from unregistered crypto trading platforms operating in Canada while they pursue registration.
The CSA declined to discuss updates to the pre-registration undertaking (PRU) regime, but stated that “more details will be published in the near future.”
The US Securities and Exchange Commission has already begun to ramp up its anti-crypto crackdown, settling charges with exchange Kraken and alleging that a stablecoin issued by Paxos is a security. Other G-7 countries, such as the United Kingdom and Canada, are stepping up efforts to police the industry in the aftermath of last year’s disasters.
Some Canadian industry participants are concerned about the possibility of onerous demands for individual approvals from major regulators in various territories, for example. Some of Canada’s marketplace rules governing alternative trading systems are currently not transferrable to other jurisdictions.
“This [PRU update] was primarily driven by the Ontario Securities Commission and will crush the Canadian crypto industry overnight as it completely changes the CSA’s own stated rules and structures and will ensure it’s simply too expensive to do business in Canada,” said one person who requested anonymity due to ongoing business with regulators.
The CSA’s increased oversight of crypto trading platforms will have an impact on some of the country’s large global exchanges. Binance Canada, for example, has previously had run-ins with the OSC.
Crypto exchange regulated in the United States Coinbase is also regulated in Canada by the Autorité des marchés financiers (AMF), the organisation in charge of financial regulation in the Canadian province of Quebec.
According to a source familiar with the situation, Coinbase has the option of switching from the AMF to Ontario’s OSC if it makes sense for the exchange
Coinbase did not respond to requests for comment. The OSC did not respond immediately with a comment.
