Regulatory Alerts2020-01-16
CSA Staff Notice 21-327: Guidance on the Application of Securities Legislation to Entities Facilitating the Trading of Crypto Assets
The Canadian Securities Administrators issued this notice to clarify that securities legislation applies to crypto asset trading platforms unless they facilitate immediate delivery of the underlying assets. The guidance establishes that platforms retaining ownership, possession, or control of crypto assets expose users to counterparty risks, thereby creating contractual rights that constitute securities or derivatives. The staff warns that non-compliant platforms face enforcement action and directs firms to the Regulatory Sandbox for innovative projects seeking exemptive relief.
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