The Canadian Securities Administrators (CSA) have once again extended the deadline for crypto trading platforms (CTPs) to comply with regulations concerning stablecoins, marking the second such extension. Initially introduced in February 2023, these regulations prohibit value-referenced crypto assets (VRCAs) that are not backed by a single fiat currency, such as algorithmic stablecoins, effective by the end of this year. However, trading in fiat-backed stablecoins (FBCAs) can continue until the new regulations take effect on April 30, 2024.
After receiving feedback about technical challenges from various crypto asset trading platforms, the CSA decided to push back the compliance deadline from April 30 to October 31, and most recently to December 31, 2024. The CSA has expressed openness to alternative mechanisms for meeting its regulatory requirements, emphasizing that it is actively engaging with CTPs and industry participants. The extension is aimed at providing more time for CTPs to either comply with existing regulations or propose alternatives that can adequately address investor protection concerns.
“The extension is intended to provide more time for CTPs to either comply with the terms and conditions or to propose alternatives that address investor protection concerns,” stated the CSA. After December 31, CTPs will be permitted to trade only in VRCAs that comply with the conditions of their registration and exemptive relief decisions, or their pre-registration undertakings (PRUs).
The implementation of these stringent regulations has led to a significant exodus of international exchanges from Canada. Between March and May 2023, notable platforms such as OKX, dYdX, Paxos, Bybit, and Binance ceased operations in the country. In contrast, some companies are determined to remain in the Canadian market.
Kraken has expressed its commitment to staying operational in Canada and has actively sought restricted dealer status. Mark Greenberg, Kraken’s managing director for Canada, praised the CSA for its collaborative approach: “The Canadian regulators have been collaborative, helpful. […] There’s a clear regulatory pathway. It’s allowed us to invest in the country.”Additionally, Gemini has taken steps towards compliance by filing a pre-registration undertaking in April 2023, which is the first move toward becoming a restricted dealer.
As the CSA continues to refine its regulations around stablecoins and VRCAs, the crypto landscape in Canada is undergoing significant changes. While some companies may choose to exit due to stringent regulations, others, like Kraken and Gemini, are adapting and looking to thrive under the new regulatory framework. The extended deadline provides a crucial opportunity for CTPs to align with regulations while ensuring investor protection remains a priority. As the industry evolves, all eyes will be on how these developments impact the future of crypto trading in Canada.
September 2024, Cryptoniteuae