Pragmatic Approach to Regulating Crypto Asset Trading Platforms
Recent developments in the U.S. crypto asset industry, such as the recent FTX scandal, SEC filings against Binance and Coinbase, and the recent Ripple Labs ruling, have shed a light on the absence of regulation targeting trades of crypto assets in the U.S.
In contrast, despite not taking a firm position as to whether certain crypto assets constitute securities or derivatives, Canadian securities regulators have established a framework that has enabled crypto asset trading platforms to offer crypto assets to the public and investment fund managers to offer public crypto asset investment funds to Canadian investors.
We’ve prepared an guide of the framework developed by Canadian securities regulators, in which we explore the following topics:
The Canadian approach to the determination of whether a given crypto asset constitutes a security or a derivative;
Highlights of Canadian securities regulators’ guidance regarding stable coins;
The obligation for crypto asset trading platforms to register as dealers in Canada;
Recent U.S. case-law and whether it could result in a legal challenge to the Canadian framework;
The requirements crypto asset trading platforms must fulfill to obtain registration as dealers;
The Ontario Securities Commission’s recent report outlining deficiencies among crypto asset trading platforms; and
The roadmap prepared by the CSA for investment funds that wish to invest in crypto assets other than Bitcoin and Ether.
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