Canada to Apply New Laws for Cryptocurrencies
According to the information, which is published by the Canadian Securities Administrators, the new guidance will accept most of the digital asset exchanges working in the country under the protection of securities legislation. Any crypto exchange facilitating securities or asset trading will be subject to securities law.
The notification explicitly specifies that the securities legal system can be applied to platforms facilitating the purchasing and selling of crypto holdings, which falls under the category of goods, “because the user’s treaty right to the crypto asset may itself constitute a derivative.” As a result, most of the centralized crypto exchanges will be obliged to comply with securities law. But, the guidelines make an exception: non-custodial exchanges can be ruled out from the list because customer funds are absent there.
CSA Chair and President and CEO of the Autorité des marchés financiers, Louis Morisset, declared: “Fin-tech businesses make lots of efforts to accord innovative services, products, and apps for Canadian residents. In our turn, we should improve our regulatory framework in the direction of the protection crypto industry.”
“The staff notice published today will assist platform operators in defining whether their activities are subject to securities legislation.” What do we see? Such announcement raised worries in the industry as many digital currencies offer potential voting or dividend rights to holders, looking like as securities.
What if the business model will be altered by exchanges?
The agency recommended the exchanges to ask for the help of legal counsel. Agency also specified its aims to undertake action against any such platforms. At the same time, the country (Canada or abroad) will not play a role when it is offering services to Canadian clients.
Right now, many countries are preparing to adjust the digital asset industry within the existing laws or by formulating new ones. Recently, the Malaysian market regulator mandated all token sales to be conducted on registered initial exchange offering platforms, with many other limitations.