Canadian Securities Administration Issues Guidance On Platforms Facilitating Crypto Asset Trading

The Canadian Securities Administration (CSA) issued "CSA Staff Notice 21-327 Guidance on the Application of Securities Legislation to Entities Facilitating the Trading of Crypto Assets" on January 16, 2020. This Staff Notice carries important implications for crypto asset trading platforms to help determine whether a transaction or a trading platform falls under the purview of Canadian securities law.

CSA/IIROC Consultation Paper 21-402, March 14, 2019 (the Consultation Paper)

The Staff Notice confirms the approach set out in CSA/ Investment Industry Regulatory Organization of Canada Consultation Paper 21-402 Proposed Framework for Crypto Asset Trading Platforms that was published on March 14, 2019. This Consultation Paper stated that securities legislation applies to platforms that support the trading of crypto assets that are securities or derivatives. A security can be a tokenized security (commonly referred to as a security token in the industry) that carries