Canadian Regulator Gets Strict With Crypto Trading Platforms Following FTX Collapse

Zinger Key Points
  • Following FTX collapse, Canada's financial authority is implementing stricter regulations for crypto companies.
  • Companies that provide services to Canadian citizens are subject to the same regulations.

Canada's financial authority is strengthening the requirements that crypto trading platforms must adhere to in an apparent response to the collapse of crypto exchange FTX FTT/USD.

Additionally, there will be stricter enforcement of licensing, including for companies that are accessible to Americans but are located abroad.

The Canadian Securities Administrators (CSA) outlined stricter guidelines for crypto companies, including keeping client assets separate from proprietary business assets and making sure client assets are handled with an "appropriate custodian," and not allowing Canadian users to employ margin or leverage.

See Also: FTX Founder Sam Bankman-Fried Charged By SEC For Defrauding Investors

The same regulations apply to platforms outside of Canada that provide services to Canadians.

Crypto Companies Must Secure A PRU

The CSA demanded that cryptocurrency companies secure a pre-registration undertaking (PRU) license in order to commit to registering in August.

The conditions are therefore the same as those for platforms that are registered.

Not showing any leniency, the CSA will “will consider all applicable regulatory options to bring the platform into compliance with securities law, including enforcement action,” if a platform fails to provide a PRU to its regulator, according to the statement.

A deadline has yet to be announced.

The watchdog considers stablecoins "securities and/or derivatives."

On registered or pre-registered platforms, Canadian traders are not permitted to trade certain crypto assets or be exposed to them.

Next: Tron's Justin Sun Is 'Deploying More Capital' To Halt Decline Of USDD Stablecoin

Photo by Lewis Parsons on Unsplash

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Posted In: CryptocurrencyGovernmentNewsRegulationsMarketsCanadian Securities Administratorscrypto exchangeFTXSam Bankman-Fried
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