Canadian crypto regulators are clamping down, with the authorities in the jurisdiction giving crypto companies 30 days to meet their demands, or face strict consequences.
The Ontario Securities Commission is issuing deadlines
In order to remedy the “emergency” posed by the collapse of FTX, the Canadian regulators feel that it is their duty to step in and intervene in order to protect investors.
Canada has a long history of regulators being idle whilst centralised exchange operators are profligate with their customers’ funds: the meltdown of Quadriga CX, one of the largest exchanges in the world at the time, and the largest in Canada, was a case highly similar to that of FTX: there were not enough checks and balances over the founder, who was trading against his own customers until he lost all their money (before eventually passing away under mysterious circumstances in India).
In order to continue to serve Canadian clients, exchanges will be forced to ensure that they are adhering to a series of rules, and to certify this within 30 days.
JUST IN: Canada's financial regulator has given #cryptocurrency companies 30 days to comply with its updated registration requirements.
— Coingraph | News (@CoingraphNews) February 23, 2023
What rules do Canadian exchanges have to follow?
There are many different guidelines and rules that have been set out by the Canadian regulators, and this has been welcomed by those who are championing higher degrees of regulation in order for there to be greater clarity in the industry.
Some of the rules seem like completely normal and common sense rules, such as the fact that exchanges must keep their own money separate from their clients’ funds. In fact, it is amazing that this wasn’t illegal beforehand, and shocking that banks are still allowed to operate in this way.
However, other rules are more contentious. For example, exchanges are now no longer allowed to offer margin trading or other forms of debt, nor are they allowed to conduct stablecoin offerings without explicit permission from regulators.
When questioned as to how the regulator came to action so quickly, the CEO of the OSC Grant Vingoe explained that its due to the fact that there is currently an emergency in the crypto market, and that regulation is desperately needed.
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