Canada tightens rules for crypto exchanges, margin trading

abdelaziz Fathi

Canada’s financial regulator will reportedly roll out a co-ordinated oversight regime for cryptocurrency activities later this month.

Two people, who have been briefed on the plans, told CoinDesk that all crypto trading platforms seeking registration will be obliged to sign undertakings to comply with investor protections.

The new rules will also make it more difficult for retail investors to trade cryptocurrencies using leveraged bets in the aftermath of the FTX collapse.

The Canadian Securities Administrators (CSA) plans to strengthen its oversight of cryptocurrency exchanges operating in the country. As part of a basket of new registration requirements, crypto applicants will have to agree to tighter rules, including a ban on margin and leverage trading.

Additionally, the proposal prevents crypto providers from accepting payments via credit cards and requires them to keep customer assets segregated from their own operational funds.

These measures also include suggestions that providers should be forced to hold all Canadian clients’ assets “with an appropriate custodian and segregate these assets from the platform’s proprietary business.”

To continue operating while their application is being processed, cryptocurrency platforms must give their primary regulator a pre-registration undertaking. By making these commitments, the crypto exchange acknowledges that its platform is bound by terms and conditions that address investor protection issues.

If a cryptocurrency trading platform is unable to file an undertaking or does not adhere to its requirements, CSA members may seek legal action.

The CSA went on to warn that it reached out to crypto-asset trading platforms to initiate the registration process, or face enforcement action, including temporary orders.

The new registration rules come amid a nation-wide crackdown on unregulated exchanges. Binance, the world’s largest cryptocurrency exchange, informed a Canadian provincial regulator last year that it would no longer be accepting new customers. The industry’s giant seemingly opted to pull out of Canada, rather than comply with securities law or face regulatory scrutiny.

The move follows the Ontario Securities Commission’s onslaught on Binance back in 2021 for their alleged failure to comply with securities law. At the time, OSC said Binance has broken its word to regulators after it had previously told its staff that no new transactions involving Ontario residents would occur.

Read this next

Digital Assets

Societe Generale launches its own cryptocurrency, EURCV

French banking giant Societe Generale has launched its own euro-pegged stablecoin, EUR CoinVertible (EURCV). This move by France’s third-largest bank reflects the increasing trend of mainstream financial institutions embracing cryptocurrencies on a global scale.

Executive Moves

Stelios Eleftheriou leaves NAGA Group to join BVNK

BVNK, the crypto-powered payments and banking platform for businesses, has appointed FX industry veteran Stelios Eleftheriou, who has a colorful career across the gaming industry, as Business Development Director (CFD & iGaming).

Retail FX

CAPEX.com introduce ETFs on UAE, Saudi stocks

Abu Dhabi-based broker CAPEX.com has expanded its asset class offerings to include a new suite of Exchange-Traded Funds (ETFs) tailored for the United Arab Emirates (UAE) and Kingdom of Saudi Arabia (KSA) markets.

Institutional FX

Tradeweb Markets surges past $1.80 ADV in November

Tradeweb Markets Inc. (Nasdaq: TW) has reported a total trading volume of $38.2 trillion and a record average daily volume (ADV) of $1.80 trillion for November 2023. These figures mark a 59.2% year-over-year increase.

Inside View

A Mission in Accounting

Ismael Haber, an auditor and accountant, has made it his mission to help businesses improve the quality of their financial information by eliminating fraud and error. In the next five years, the demand for these specific financial services, being external financial audits, forensic accounting, and other fraud preventive and detective services is envisaged to increase.

Institutional FX

CME Group to launch new spot FX marketplace ‘CME FX Spot+’ in 2024

US derivatives exchange, CME Group today announced plans to introduce ‘CME FX Spot+’, a novel spot foreign exchange (FX) marketplace.

Interviews

FMLS:2023: Andrew Mreana provides an exclusive sneak peek into cTrader’s 2024 innovations

cTrader’s focus for the next year would be on developing new tools for Introducing Brokers (IBs) and partners, particularly those related to algorithmic (algo) trading, the company’s head of growth told FinanceFeed in an exclusive interview at the Finance Magnates London Summit 2023.

Digital Assets

Grayscale’s Ethereum ETF stalls: SEC extends review to January 2024

The United States Securities and Exchange Commission (SEC) has extended the evaluation period for Grayscale’s proposed Ethereum spot ETF.

Institutional FX

BMLL completes China equity data offering: Shanghai, Shenzhen, and Hong Kong

“Demand for China data has never been higher. This is set against a general industry trend of increased market participant sophistication, and an increasing demand for quality historic market data to understand market microstructure and venue behaviour. Market participants need to get the full picture of market quality, liquidity and order book dynamics to ultimately make better informed decisions on the markets they trade and the venues they run.”

<