Since March 2021, Canadian crypto traders have been operating under interim regulations, but now it's time for crypto trading platforms (CTPs) to finalize their membership in the Canadian Investment Regulatory Organization (CIRO).
Since March 2021, Canadian crypto traders have been operating under interim regulations, but now it’s time for crypto trading platforms (CTPs) to finalize their membership in the Canadian Investment Regulatory Organization (CIRO). The Canadian Securities Administrators (CSA) and CIRO have issued a reminder to CTPs about the impending deadline for full-fledged investment dealer status and CIRO membership.
Equal Treatment for CTPs and Traditional Trading Platforms
CTPs facilitate trading in crypto asset securities, derivatives, and related instruments. Since March 2021, they have been operating as restricted dealers while working towards mandatory CIRO membership. As the interim period ends, regulators expect CTPs to fully comply with CIRO regulations and complete their applications. Unlike before, new CTPs will not be granted an interim operating period before securing CIRO membership. Besides CIRO membership, CTPs must register in individual jurisdictions. Currently, there are 15 CTPs, with Coinsquare being the first to achieve CIRO membership, having submitted its application in November 2020 and received membership notification in October 2022.
Evolving Regulation of Canadian Crypto Securities
The CSA initiated pre-registration requirements for CTPs in August 2022, focusing on customer protection through binding agreements. In February 2023, the CSA tightened these requirements, particularly affecting stablecoins, in response to the failures of various crypto firms during the bear market. Crypto exchanges have responded differently to the new regulations, with Kraken and Gemini quickly complying, while OKX, dYdX, Paxos, ByBit, and Binance exited the Canadian market.
In July 2023, the CSA provided guidance for investment firms holding crypto assets, expanding this guidance further in January. Additionally, Canada has had Bitcoin exchange-traded funds (ETFs) available since 2021.
