Canadian Regulator Issues New Guidance for Cryptocurrency Exchanges

Canadian authorities have issued new guidance to determine which digital currency trading platforms fall under derivatives law.

The Canadian Securities Administration (CSA) explained new provisions in the “Guidance on the Application of Securities Legislation to Entities Facilitating the Trading of Crypto Assets” published on Jan. 16. 

In general, the agency drew a line between trading platforms that make an immediate delivery of a crypto assets to its users, and those that hold the transaction of crypto assets until the user makes a later request.

To what exchanges do securities laws apply?

Following an analysis of trading techniques on different platforms, the CSA concluded that some of them only provide their users with a contractual right or claim to a crypto asset, and do not immediately transfer it to a user. Such crypto trading platforms are subject to securities legislation, and thus fall under derivatives laws. The guidance detailed:

“Potentially, there will be ongoing…