Canada-based crypto trading platforms (CTPs) are facing a stringent regulatory deadline imposed by the Canadian Investment Regulatory Organization (CIRO). These crypto operators must comply with the deadline to complete their applications for investment dealer status.
The Canadian Securities Administrators (CSA) has “reminded” CTPs to adhere to CIRO membership requirements to ensure regulatory alignment and customer protection.
In 2021, the CSA and CIRO allowed CTPs to operate as restricted dealers for a temporary period. During this period, they could offer services while seeking full CIRO membership.
However, as the transitional period comes to an end, Canadian regulators have set firm deadlines for crypto platforms to transition from restricted dealers to fully authorized investment dealers.
“Given the time that has passed, CSA members expect CTPs to have carefully reviewed and understood the requirements to become investment dealers and CIRO members, and to be actively engaged with CIRO on their applications,” the CSA stated. The CSA members do not intend to extend the time-restricted dealer registration for CTPs.
Canada’s Crypto Growth in Recent Times
According to a KPMG report, 50% of financial services in Canada offer at least one cryptocurrency feature to their clients. The bi-annual survey noted that about 52% of these services include crypto asset trading.
The expansion of crypto services has come in response to high client demand, with 8 in 10 platforms citing strong appetite for crypto from retail investors.
Further, spot Bitcoin exchange-traded funds (ETFs) have been available in Canada since 2021, providing Canadians with various investment options. However, Canadian financial institutions experienced significant outflows, losing a staggering $832 million in the first half of the year.
