US-based cryptocurrency exchange Coinbase has obtained a restricted dealer license in Canada and now has two subsidiaries.
According to a CNBC story from April 4, Coinbase has acquired a new license in Canada and is now registered as a restricted dealer with the Canadian Securities Administrators (CSA) in Ontario.
According to CSA’s national registration statistics, Coinbase Incorporated, a restricted dealer, is one of two Coinbase-related firms registered in Canada. Coinbase Canada, the other, has an international dealer registration.
“A special kind of dealing registration used for firms that do not quite fit under any other category” is what the CSA defines as restricted dealer registration. Regulators set regulations on an individual basis for these types of firms.
Legal intelligence source JD Supra states that foreign dealers are prohibited from trading with Canadian clients in equity or debt securities of Canadian issuers other than government issuers.
The cryptocurrency exchange Coinbase has made several significant moves in Canada before obtaining its new license. In August 2023, the exchange made its formal debut in Canada. Later, it extended its services to citizens of Canada by forming a joint venture with the regional financial services company Peoples Trust Company.
According to the latest announcement from the firm, Coinbase will have approximately 200 full-time local workers working out of a tech cluster in Canada as of April 2024.
Competing exchanges, including Kraken, have begun registering as registered dealers in Canada. Kraken submitted a pre-registration commitment to the Ontario Securities Commission in Canada in March 2023 to get restricted dealer status.
In February 2023, the CSA released new guidelines for crypto asset trading platforms, which Kraken sought to comply with.
The new regulations state that local cryptocurrency trading platforms must adhere to stronger custody guidelines, limitations on leverage, and a prohibition on trading stablecoins without the CSA’s prior written approval.
Coinbase’s country director for Canada, Lucas Matheson, reportedly stated, “It’s something we’ve been working on for almost three years here in Canada, and more specifically with the Ontario Securities Commission over the last 12 months.”
