This change aims to create a safer, more regulated environment for cryptocurrency investors in Canada.
Canada’s authorities have presented the CTPs with a deadline to submit their applications for investment dealer registration and membership with the Canadian Investment Regulatory Organization (CIRO).
This push coincides with the end of the previously allowed transitional period, during which Canadian cryptocurrency trading platforms (CTPs) must adhere to the standards set by the financial regulatory authorities.
Deadline Approaches for Canada Crypto Exchanges
With the CIRO membership deadline rapidly approaching, Canadian CTPs are hurrying to verify that their business processes fit with the appropriate regulatory criteria.
Recently, the CSA and CIRO have sent out reminders to these platforms, pointing out the necessity of transitioning from being restricted dealers to fully recognized investment dealers.
This is of fundamental relevance for CTPs, as they will maintain their legal position in the context of Canada’s financial market.
In a March 2021 notification, it was made known to the staff in a notification that was distributed in March 2021 that CTPs were granted a temporary period of time during which they were permitted to provide their products while they were investigating the possibility of obtaining full authorization.
More organizations are being required to comply with the stated laws, so this is not a new development. In the past, the CSA and CIRO have offered specific recommendations and proposed an interim solution that adopts a more liberal stance towards the activities of cryptocurrency exchanges.
However, we are currently phasing out this strategy and setting clear expectations for CTPs to meet all the standards required to become CIRO members. As a result of these regulations, a number of platforms have demonstrated compliance.
For instance, Coinsquare has successfully migrated and currently holds membership in the CIRO. Some other platforms, on the other hand, have decided to withhold their participation in the Canadian market rather than comply with the stringent regulations.
This decision serves as further evidence of the diverse methods employed by the industry. This action follows a series of actions taken by the Canadian authorities to enhance the regulation of the sector, particularly following the events that resulted in the bankruptcy of several blockchain enterprises.
Next Steps for Crypto Exchanges In Canada
The CSA and CIRO’s robust approach aims to contribute to the development of a less risky and more regulated environment for cryptocurrency investors in Canada. CTPs must now fully apply, demonstrate their operational readiness, financial stability, and adhere to CIRO’s guidelines.
CIRO has also developed a readiness questionnaire to aid platforms in assessing their preparedness for joining CIRO. CIRO conducts this screening as part of the screening process to ensure that the platforms accepted into membership are capable and meet the established legal requirements.
