CSA Toughens Crypto Exchange Requirements
The Canadian Securities Administrators (CSA) is toughening its requirements on crypto exchanges operating in this country. For exchanges operating in Canada – including those based elsewhere but operating in the country – it was announced in August that unregulated exchanges would be expected to commit to a pre-registration undertaking (PRU) to adhere to the same terms and conditions as regulated platforms. Now, the CSA says that if a PRU has not been delivered to a platform’s principal regulator by a deadline it will be shortly announcing, it will consider action including enforcement to bring them into compliance. It has also expanded terms to include “requirements to hold Canadian clients’ assets with an appropriate custodian and segregate these assets from the platform’s proprietary business, as well as a prohibition on offering margin or leverage for any Canadian client.” Appropriate custodians will generally include those regulated by a financial regulator in Canada, the U.S., or a similar jurisdiction.