The Canadian Securities Administrators (CSA) have outlined a set of rules that must be adhered to by all platforms offering cryptocurrency trading, in a bid to protect their residents from the financial risks associated with crypto, as the global crypto community tries to navigate a major shakeup in the wake of the cryptocurrency exchange crash. FTX Last month, as part of these rules, Canada imposed a ban on cryptocurrency exchanges offering “margin trading or leverage” to residents of the country.
In margin trading, users are allowed to borrow money from the exchange and use it to make a deal, this allows traders to invest more than they have in crypto assets, which may or may not result in profitable results.
Canada will soon issue a deadline for unregistered crypto companies to disclose their details and submit a Pre-Registration Undertaking (PRU) to the financial regulator, according to gadgets360.
Companies will have to ensure they are in compliance with the laws of Canada, and the CSA has further made it clear that even international exchanges that Canadians can access will also have to abide by these rules as part of securities regulation.
The text of the official statement from the CSA reads: “Cryptocurrency trading platforms making these covenants agree to comply with expanded terms and conditions that will include, requirements to hold assets of Canadian clients with an appropriate custodian and segregate such assets from the business owned by the platform, as well as a prohibition on making margin or leverage for any Canadian client.
Crypto companies will have to choose custodians to store the assets of Canadian clients, and the custodians will also have to be regulated by a financial regulator in Canada, the US, or similar jurisdictions.
The statement added, “After recent events in the digital currency market, CSA is strengthening its approach to supervising cryptocurrency trading platforms by expanding existing requirements for platforms operating in Canada. We encourage you to exercise caution and consider seeking advice from a registered investment advisor before investing in cryptocurrency.”
In a recent survey, the Securities Commission in Ontario said that 13 percent of Canadians currently own digital assets such as cryptocurrencies or non-fungible tokens (NFTs).