In the wake of the FTX collapse and the spreading contagion, Canadian authorities are taking steps to better protect Canadian cryptocurrency investors.
On December13, the Canadian Securities Administrators (CSA), a council of the country’s provincial and territorial securities regulators, released an update for the country’s crypto trading platforms.
The CSA claimed that by enlarging current requirements, the authority has been strengthening its strategy for overseeing crypto trading platforms.
The announcement states that the newly expanded terms, which prohibit them from providing margin or leverage trading services to any Canadian clients, must be complied with by all cryptocurrency trading firms operating in Canada, both domestic and foreign ones.
Additionally, the expanded terms mandate that Canadian providers of cryptocurrency exchange services separate their custody assets from the platform’s proprietary business.
The CSA noted in the statement that “custodians will generally be considered qualified if they are regulated by a financial regulator in Canada, the United States, or a similar jurisdiction with a supervisory regime for conduct and financial regulation.”
The council urged investors to only invest using a platform that is registered with CSA members, highlighting the fact that even after the adoption of these measures, crypto assets or any financial products related to them are high-risk investments.
The CSA did not respond right away when Cointelegraph asked for comment.
The CSA made reference to its prior communication from August 15, 2022, to Canadian-based cryptocurrency trading platforms in the new statement. The authority stated that it anticipated pre-registration undertakings from unregistered cryptocurrency trading platforms operating in Canada while they pursue registration.
The CSA notification arrived soon after FTX and Bitvo, a Canadian cryptocurrency platform, agreed to sell each other their businesses in June 2022. FTX initially intended to use the acquisition as a component of its plans for international growth. But Bitvo eventually succeeded in stopping the acquisition by the now-defunct exchange, enabling the company to carry on even after FTX’s demise.
The acquisition wasn’t finalised because the companies were working to meet the closing conditions, the most important of which was regulatory approval from the Alberta Securities Commission, Bitvo CEO Pamela Draper told Cointelegraph in November.