The FTX logo is shown on the FTX Arena, where the Miami Heat NBA basketball team play, in Miami, Fla., Tuesday, Dec. 6, 2022. The Canadian Securities Administrators (CSA) has set out new rules for unregistered cryptocurrency trading platforms operating in Canada following a wave of bankruptcies in the space including FTX, Voyager Digital and Celsius Network. THE CANADIAN PRESS/AP-Lynne Sladky
TORONTO – The Canadian Securities Administrators (CSA) has set out new rules for unregistered cryptocurrency trading platforms operating in Canada after a wave of bankruptcies in the space including FTX, Voyager Digital and Celsius Network.
The group of securities regulators says the additional investor protections include stricter requirements on where investor cash and crypto assets are held to keep them separate from the platforms’s own finances, along with no longer allowing unregistered platforms to offer margin, credit or other forms of leverage to any clients.
Among the new rules is a requirement that unregistered trading platforms have written permission from the regulator before allowing clients to buy or deposit so-called stablecoins, a term regulators say is misleading and instead refers to them as value-referenced crypto assets.
The added restrictions build on a framework of rules securities regulators rolled out last August that trading platforms must commit to while their registration is pending.
The CSA, which helps co-ordinate the policies of provincial securities regulators, says if unregistered platforms don’t submit updated commitments it will take action to “off-board” Canadian users from trading platforms and restrict access to them.
In its notice of the update, the CSA reminded investors that crypto trading comes with elevated risk and may not be suitable for many investors and that some trading platforms accessible by Canadians may not have essential safeguards in place to protect assets from loss, theft or misuse.
This report by The Canadian Press was first published Feb. 22, 2023.
