TORONTO – Canada’s securities regulators will gather feedback from various industry players on the rules that should be in place for cryptocurrency trading platforms such as Bitcoin, Ethereum and Ripple.
The provincial agencies, represented by the Canadian Securities Administrators (CSA) and the Investment Industry Regulatory Organization of Canada (IIROC) released a joint consultation paper to this effect on Thursday.
“Regulators around the world are currently reviewing important issues around crypto-active regulation, which includes the appropriate regulation of platforms,” says the consultation paper.
The document adds that “at least some of the well established cryptoactives (…), such as Bitcoin, are not currently, as such, securities or derivatives.”
“They have similar characteristics to existing merchandise, such as currencies and precious metals,” the paper continues.
No platform is currently recognized as a stock exchange or otherwise authorized to exercise a nor permitted to carry on a market or broker activity in the country, the document says.
“As a result, the CSA urged Canadians to exercise caution when purchasing cryptoactives.”
The consultation document does not deal with any particular platform, but its publication follows the high-profile issues of QuadrigaCX, one of the largest cryptocurrency trading platforms in Canada.
QuadrigaCX and its affiliates received court protection against their creditors in Nova Scotia last month after CEO and CEO Gerald Cotten died in December at the age of 30. a trip to India.
According to the court documents, Cotten was the only person to have the encrypted access codes needed to access $ 190 million in Bitcoins and other cryptocurrency blocked in QuadrigaCX’s offline digital wallets. An additional $ 70 million in cash would also be owed to QuadrigaCX users, largely tied to bank drafts held by payment processors.
The CSA and IIROC consultation document invites interested parties to submit written comments on various issues by May 15. The responses will help regulators develop a new policy framework for crypto-active trading platforms.
Among other things, the paper asks whether it is appropriate for platforms to define the rules for their own markets.
The paper also asks what standards should be in place to limit the risk of loss or theft of cryptoactives, and what type of insurance coverage the platforms should be required to obtain.