Canadian Securities Regulators to Strengthen Crypto Oversight After FTX Collapse

The country's securities regulatory body will consider enforcement action if crypto companies do not comply.

AccessTimeIconDec 13, 2022 at 11:22 a.m. UTC
Updated Dec 13, 2022 at 4:18 p.m. UTC

The Canadian Securities Administrators (CSA) will strengthen its approach to crypto oversight following the recent events in the crypto market, according to a statement on Monday.

The body, which consists of securities regulators from each of the 10 provinces and three territories in Canada, said it would be expanding its existing requirements for platforms that are currently operating in the country. In August it had announced that it was expecting unregistered crypto companies in the country to do a pre-registration undertaking (PRU) while their application was approved.

"If a platform currently subject to securities legislation in Canada does not deliver a PRU to its principal regulator or cease operating, the CSA will consider all applicable regulatory options to bring the platform into compliance with securities law, including enforcement action," the statement said.

Regulators around the world have been looking more critically at crypto since FTX, which was the third-largest exchange by volume at one point, declared it was bankrupt and had misused customer funds. Its former CEO ,Sam Bankman-Fried, was arrested on Monday after the U.S. filed criminal charges.

Recent events, where some of the biggest crypto companies and coins have collapsed including crypto lender Celsius Network and Terra's algorithmic stablecoin terraUSD (UST), have led to billions being wiped out of the crypto market within a year.

Crypto trading platforms that are registered as a security or have applied for a PRU are banned from permitting Canadian clients to trade or obtain exposure to crypto securities or derivatives, the statement reminded companies.

"The CSA continues to monitor and assess the presence and role of stablecoins in Canadian capital markets," the statement said.

UPDATE (Dec. 13, 13:17 UTC): Adds line on derivatives inclusion in sixth paragraph.


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Camomile Shumba

Camomile Shumba is a CoinDesk regulatory reporter based in the UK. She previously worked as an intern for Business Insider and Bloomberg News. She does not currently hold value in any digital currencies or projects.