CSA Issues Key Guidance On Cryptocurrency Related Platforms

On January 16, 2020, the Canadian Securities Administrators (the CSA) published Staff Notice 21-327 Guidance on the Application of Securities Legislation to Entities Facilitating the Trading of Crypto Assets. The Staff Notice provides guidance on factors the CSA considers when determining whether Canadian securities legislation applies to entities that facilitate transactions relating to crypto assets (Platforms).

The Staff Notice is generally consistent with the approach suggested by the CSA and the Investment Industry Regulatory Organization of Canada (IIROC) in Consultation Paper 21-402 — Proposed Framework for Crypto Asset Trading Platforms. The Consultation Paper stated that if crypto assets, which are securities or derivatives, including contracts or instruments that are derivatives based on crypto assets, are traded on a Platform, the Platform is subject to Canadian securities legislation. We summarize the CSA guidance below.