Canada Requires Crypto Asset Trading Platforms to Register Within 30 Days

The Canadian Securities Administrators (CSA) issued a notice on Wednesday mandating registration for cryptocurrency exchanges in an effort to enhance protection for cryptocurrency investors.

Stan Magidson, CSA Chair and Chair and CEO of the Alberta Securities Commission, said: "Recent insolvencies involving several crypto asset trading platforms highlight the tremendous risks associated with trading crypto assets, particularly when conducted on unregistered platforms based outside of Canada."

CSA stated in the announcement: "Unregistered CTPs that continue to operate in Canada while pursuing registration are expected to provide an enhanced pre-registration undertaking to their principal regulator within 30 days of publication of this notice." 

These pre-registration undertakings will include, among other things, enhanced expectations regarding the custody and segregation of crypto assets held on behalf of Canadian clients and a prohibition on offering margin, credit, or other forms of leverage to any Canadian client. They will also prohibit CTPs from permitting clients to purchase or deposit value-referenced crypto assets (commonly referred to as stablecoins) and proprietary tokens without the prior written consent of the CSA, said the regulator.

"If a CTP is unable or unwilling to provide an enhanced pre-registration undertaking, the CSA expects it will take appropriate action to off-board existing Canadian users and impose restrictions to prevent Canadian users from accessing its products or services," CSA added.

With the slump in the crypto market and the frequent cases of crypto trading fraud, more and more countries have begun to impose stricter regulations on the industry. 

This month, both the U.S.​ and U.K.​ governments have put forward proposals to tighten crypto regulation. Meanwhile, Dubai has also introduced new encryption regulations to prohibit the circulation of anonymity-enhanced cryptocurrencies. Last week, Rwanda Government​ said the country's financial services providers are forbidden from engaging in "any crypto-related activities until a regulatory framework has been put in place."