The Canadian Securities Administrators (CSA) published a notice on February 22 outlining the new obligations they expect of crypto asset trading platforms (CTPs) to register in Canada. The CTPs will enter into a new version of Pre-registration Commitments (PRU), legally binding documents. Registered GTPs are contacted by their key regulators to meet new expectations.
The new obligations represent investor protection in the event of CTP's bankruptcy in 2022, the CSA wrote. The new obligations relate to asset segregation, leverage, capital adequacy, transparency and many other issues. The most placed ad:
"Prohibits CTPs from purchasing or investing in value-based crypto assets (commonly referred to as stablecoins) through crypto contracts to clients without CSA's prior written consent."
The announcement reads: “CTPs are prohibited from allowing Canadian clients to enter into crypto contracts to buy and sell crypto assets that are themselves a security and/or derivative. Meet the definitions of “security” and/or “derivative” in various jurisdictions Meet the definition." The CSA "does not expect to allow" other stablecoins such as algorithmic stablecoins.
However, the CSA may make exceptions in writing. The advisory reads: “We recognize that VRCAs [...] can serve as a ramp to hold assets in CTP, as a store of value during periods of volatility in the crypto-asset market, to trade other crypto-assets or convert your crypto-assets into money. trust". currency or [. ..] as a means of payment”.
See Also: Crypto.com Removes USDT From Canadian Users After CSO Ban
Coinsquare, a Canadian-registered CTP, lists USD Coin (USDC) and Dai (DAI) stablecoins among its 40 offerings at the time of writing.
CSA is an umbrella organization of provincial authorities in Canada. The February 22 memo was the second update to a document filed in August.
