Tighter Controls Put in Place for Crypto Exchanges and Margin Trading in Canada

According to unidentified sources, the Canadian Securities Administrators (CSA) will introduce a coordinated supervision framework for cryptocurrency transactions later this month. All bitcoin trading platforms seeking registration will be required to sign undertakings that agree to investor safeguards under the new guidelines. Also, crypto applicants would need to agree to stricter restrictions, such as a prohibition on margin and leverage trading, making it more difficult for regular investors to trade cryptocurrencies using leveraged bets and prohibiting crypto providers from taking credit card payments.

By proposing additional registration requirements, the CSA intends to tighten its regulation of cryptocurrency exchanges operating in the nation. This includes a suggestion that providers be required to store all Canadian customers' assets with a suitable custodian and keep these assets separate from the platform's own company. Additionally, the plan mandates that cryptocurrency providers retain consumer assets separate from their own operating finances.

Top crypto exchange in Canada

- Coinsquare - Coinsquare is a Toronto-based cryptocurrency exchange that supports the trading of several popular cryptocurrencies such as Bitcoin, Ethereum, and Litecoin.

- Kraken - Kraken is a popular cryptocurrency exchange that is based in the United States but also serves Canadian customers. It supports a wide range of cryptocurrencies, including Bitcoin, Ethereum, and Dogecoin.

To continue functioning while their application is being reviewed, cryptocurrency platforms must submit a pre-registration undertaking to their major regulator, which confirms that the crypto exchange is bound by terms and conditions that address investor protection risks. If a cryptocurrency trading platform fails to submit an undertaking or fails to meet its obligations, CSA members may take legal action.

New requirements implemented by CSA

The new registration requirements coincide with a countrywide crackdown on unregulated exchanges. Binance, the world's biggest cryptocurrency exchange, notified a Canadian provincial regulator last year that it would no longer accept new users. The industry's behemoth seems to have chosen to leave Canada rather than comply with securities legislation or face regulatory scrutiny. The action follows the Ontario Securities Commission's assault on Binance in 2021 for alleged violations of securities legislation. OSC claimed at the time that Binance had breached its commitment to regulators after previously telling its employees that no new transactions involving Ontario citizens would take place.

The CSA's new coordinated supervision system will increase investor safety and is part of a larger campaign to eliminate uncontrolled exchanges. The new regulations would make it more difficult for regular investors to trade cryptocurrencies using leveraged bets and will prohibit cryptocurrency providers from taking credit card payments. The plan also advises that providers be required to retain all Canadian customers' assets with a suitable custodian and to keep these assets separate from the platform's exclusive business.

The CSA has warned crypto-asset trading platforms that they must begin the registration procedure or risk enforcement action, including interim orders. The new registration criteria will guarantee that crypto platforms abide by securities laws and tough guidelines addressing investor protection concerns. Overall, the integrated supervision system is a crucial step toward making Canada's bitcoin business more regulated and safe.

As a reminder, WikiBit is ready to help you search the qualifications and reputation of projects in a bid to protect you from hidden dangers in this risky industry!

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