The Canadian Securities Administrators Association has required digital asset companies to comply with investor protection requirements, even if they are just waiting to be licensed.
The Securities Administrators of Canada (CSA) requires crypto-asset trading platforms to commit to investor protection terms and conditions even while their applications for registration and licensing are pending. This requirement will complement the securities law guidance presented last year by the CSA and the Investment Industry Regulatory Organization of Canada (IIROC).
In addition to the list of registered platforms, the CSA’s official website will include a list of companies that have applied to the agencies. The new rule comes after the CSA formed an investor protection advisory committee made up of experts with experience in regulating digital assets. The CSA notes that if any platform fails to apply to register its operations or fails to comply with the new requirement, it could be subject to strict action.
CSA previously published guidelines for cryptocurrency companies advertising their products and services on social media. Canadian regulators deemed some marketing strategies irresponsible because advertising cryptocurrency products can encourage investors to take rash actions.
Canada is trying to bring clarity to the regulation of digital assets, while tightening requirements for the industry. Last year, the Financial Transactions and Reporting Analysis and Reporting Centre of Canada (FINTRAC) expanded the list of transactions in cryptocurrency services that require customer identification (KYC).