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Canada proposes a regulatory framework for cryptocurrency exchanges

The Canadian Securities Administration (CSA) and the Investment Industry Regulatory Organization of Canada (IIROC) yesterday published a document to consult the community on crypto regulation.

The Canadian financial regulatory authorities are considering establishing rules for exchanges of cryptocurrencies in the country

The Canadian Securities Administration (CSA) and the Investment Industry Regulatory Organization of Canada (IIROC) published a consultation document yesterday, requesting feedback from the fintech community on how regulatory requirements for cryptocurrency platforms can be developed .

“The emergence of digital and cryptographic assets remains an area of growing interest” said Andrew J. Kriegler, president and CEO of IIROC in a statement yesterday, adding: “We must adapt to innovation and provide clarity to the market on the best way to adapt and apply regulatory requirements to these unique business models, while maintaining investor protection”.

Taking into account the “novel” characteristics and risks of cryptocurrencies, the regulators proposed to apply the securities laws where applicable

For example, they said that if cryptocurrencies are securities and / or derivatives traded on a stock exchange, the exchange would be subject to the regulatory requirements of securities and / or derivatives.

Utility tokens

In addition, they added that most “utility tokens” have included the distribution of securities, generally as investment contracts.

Government agencies believe that cryptocurrency platforms are hybrid in nature, meaning that they can perform functions of one or more market participants, including alternative trading systems, exchanges, distributors, custodians and clearing agencies.

Therefore, they are considering the preparation of a set of “customized” regulatory requirements to address the risks and characteristics of cryptocurrency platforms.


Currently, none of the cryptocurrency exchanges in Canada is recognized as an exchange. Nor is it authorized to operate as a market or distributor, according to the document.

The recent issue of the QuadrigaCX exchange, following the death of its CEO, highlighted the lack of crypto industry regulations in Canada.

The CEO of the Canadian exchange, Gerald Cotten, died last December, and apparently never allowed his staff to access the computer that stored the funds in the exchange. Only he had the keys.

QuadrigaCX still owes its clients approximately USD $ 190 million in both cryptocurrency and fiat

Last month, the securities watchdog of the Canadian province of British Columbia, the British Columbia Securities Commission (BCSC), said it has no competence to regulate the exchange in trouble.

The CSA and IIROC consultation document is open for public comment until May 1.

Published inCryptocurrencies

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