The Canadian Association of Securities Administrators has mandated digital asset companies to comply with investor protection requirements, even if they are just waiting for a license.
Cryptocurrency trading platforms are required by the Canadian Securities Administrators (CSA) to commit to complying with the terms and conditions relating to investor protection, even while their applications for registration and license are being considered. This requirement complements the securities law guidance provided last year by the CSA and the Investment Industry Regulatory Organization of Canada (IIROC).
In addition to the list of registered platforms, a list of companies that have submitted applications to the departments will be published on the official website of the CSA. The new rule comes after the CSA formed an investor protection advisory committee, which included experts with experience in regulating digital assets. The CSA notes that if a platform fails to apply for registration of its activities or does not comply with the new requirement, it may be subject to strict action.
Previously, the CSA published guidance for crypto companies promoting their products and services on social media. Some marketing strategies have been deemed irresponsible by Canadian regulators, as advertising for crypto-currency products may encourage investors to act rashly.
Canada is trying to bring clarity to digital asset regulation while tightening industry regulations. Last year, the Financial Transactions and Reporting Analysis Center of Canada (FINTRAC) expanded the list of transactions in cryptocurrency services that require customer identification (KYC).