Time To Talk: CSA Threatens Enforcement Against Unregistered Crypto Trading Platforms

The regulation of crypto asset trading platforms (CTPs) has been a recent focus of Canadian securities regulators, due in part to the popularity of crypto assets among new investors, high profile failures of Canadian CTPs and the heightened risks related to the loss and theft of crypto assets. Yet despite attracting the attention of Canadian regulators, CTPs largely continue to operate in Canada without appropriate regulatory oversight, owing to the notion that the innovative technology that CTPs promote does not fit cleanly within the established set of rules governing Canadian capital markets.

But change is on the horizon. On March 29, 2021, the Canadian Securities Administrators (CSA) and Investment Industry Regulatory Organization of Canada (IIROC) published Joint CSA/IIROC Staff Notice 21-329 - Guidance for Crypto-Asset Trading Platforms: Compliance with Regulatory Requirements (2021 Notice), providing the clearest direction to date as to how securities