Canada to develop a regulatory framework for cryptocurrency exchanges
|- Canadian regulators published a proposal for cryptocurrency industry regulation.
- The authorities are seeking opinions until May 15.
The Canadian financial regulators - Canadian Securities Administrators (CSA) and the Investment Industry Regulatory Organization of Canada (IIROC) outlined a proposal for a comprehensive regulatory framework aimed at cryptocurrency trading platforms.
The authorities announced a consultation period to gather opinions from the community. Everyone can leave a comment until May 15.
Obviously, QuadrigaCX story might have served as a catalyst that pushed the Canadian regulators to have a closer look at the notoriously dangerous industry. A loss of about $190 million in both digital and fiat currencies highlighted the need for actions to be taken to ensure investor protection and prevent potential fraud in the cryptocurrency space.
At this stage, cryptocurrency trading platforms are not legally recognized as exchanges; thus, they cannot operate as a dealer or marketplace. The companies are groping in the dark as there is no clear regulatory guidance for them. They need a set of rules and clear guidelines to build a solid business in Canada and earn consumer confidence.
Meanwhile, the proposed regulation includes mandatory licensing for cryptocurrency exchanges, establishing security and anti-money laundering procedures, insurance and risk management.
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