May 22, 2022

Coinsquare sets industry standards for online platforms involving Canadian regulators that offer trading on cryptocurrencies and related financial services. On March 10, 2020, along with four other Canadian-based platforms, we responded to the Canadian Securities Administrators (CSA) Staff Notice 21-327 of the Securities Act Enforcement Guidelines for Entities Providing Crypto Assets Trading Facilities.

The staff notice determines the position of CSA employees that a platform that does not immediately deliver cryptocettes purchased on the platform to its customers is probably dealing with securities or derivatives. In our view, this explanation represents a significant departure from previous notices by CSA staff on cryptocurrencies. Coinsquare hoped that, based on the CSA’s advisory paper published in March 2019, the platforms would be regulated under a new legal framework that would bridge the gap between cryptocurrencies and securities and derivatives, while still protecting investors. At a time of rapid change in our industry where international competition is intense, and if Canada wants to be a leader, Canadian platforms need to work closely with regulators.

As Timothy Lane, deputy governor of the Bank of Canada, acknowledged in a recent speech, “innovation, competition and consumer choice are good, and … disruption is not the enemy.” Mr. In the same speech, Lane acknowledged that cryptocurrency requires “a global effort to understand the broader impact and to ensure that the regulatory framework is appropriate for the purpose”.

For more information, please read our letter: Canadian Platform Group’s letter to CSA 21-327 March 10, 2020 Staff Notice. If you are interested in participating in this initiative, please contact our legal advice.

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