Regulatory Framework is Considered in Canada for Cryptocurrency Exchanges

By Mark Lemon – Cryptocurrency Professional

The Canadian Securities Administrators (CSA) along with the Investment Industry Regulatory Organisation of Canada (IIROC) have been looking to introduce framework for cryptocurrency exchanges. The authorities published a consultation paper to gain the opinion of the FinTech community on how this framework should be developed. Any exchange looking to buy and sell Bitcoin would be subject to the new regulation.

The cryptocurrency industry has continued to grow over the past few years and has established itself as an industry of its own. Cryptocurrencies are still in the earlier stages of development which come with inherent risks that regulators wish to address with relevant securities laws. An exchange selling crypto classified a security or derivative, would be subject to applicable securities and derivative regulations.

Canadian regulators have expressed that cryptocurrency exchanges might fall under a hybrid classification as they’re able to operate and conduct multiple functions. These exchanges can behave as alternative trading systems, custodians and clearing agencies. Canadian regulators are therefore preparing bespoke regulatory requirements to combat risks associated with buying and selling Bitcoin online.

Canadian cryptocurrency exchanges are currently not regulated under any regulatory body which was highlighted in the recent QuadrigaCX incident. CEO Gerald Cotton died last December leaving no fail safe for staff to gain access to the computer holding the platforms funds. With no provision in place, the exchange has been unable to sell crypto and exchange Bitcoin for clients and owes $190 million.

With the correct regulations in place, the QuadrigaCX situation may have been avoided allowing them to continue their operations. Cryptocurrency exchanges can handle millions of dollars’ worth of assets and should be regulated and audited according to the substantial risks involved.

You can find all the evolving news in the crypto space by heading to our site. Don’t forget we are able to sell crypto UK so check us out!

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