Canada bars exchanges from margin, leverage trading; says stablecoins might be securities

Hull Invest

Canadian Securities Administrators (CSA) on December 12 forbidden Domestically operated cryptocurrency exchanges offer margin or leveraged trading services to Canadian clients.

The regulator added that these cryptocurrency exchanges must keep their Canadian customers’ assets in proper custody and separate them from the platform’s own operations.

CSA noted that stablecoins may constitute securities or derivatives. Regulators have reminded crypto exchanges that they are prohibited from allowing Canadians to trade or be exposed to crypto assets that are securities or derivatives. CSA wrote:

“Crypto trading platforms are expected to establish policies and procedures for determining whether each crypto asset to which they provide exposure is a security and/or derivative.”

The CSA said the latest move is part of an effort to increase oversight of cryptocurrency exchanges by expanding existing requirements for these platforms.

Meanwhile, despite these measures, regulators have warned that crypto investments or financial instruments related to crypto assets are high-risk investments. Regulators have urged Canadian investors to exercise caution before investing in cryptocurrencies and to only use institutionally registered platforms.

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