S Pettigrove and M Bacina
Canadian crypto-asset platforms race to file pre-registration undertakings
Updated: Apr 27
Canadian securities regulators and the Ontario Securities Commission have released a list of crypto-asset businesses which have filed pre-registration undertakings as part of ongoing regulation of crypto-asset businesses in Canada.
Submitting a pre-registration undertaking does not guarantee registration for a platform. Nevertheless, unregistered crypto asset trading platforms commit to investor protections when filing their pre-registration undertakings. These commitments usually align with the standards imposed on registered platforms.
According to the Canadian Securities Administrators website, the following pre-registration undertakings have been submitted and reviewed:
ByteX Financial Ltd.
Catalx CTS Ltd.
Coinbase Canada, Inc.
Foris DAX, Inc.
DigiFinex Canada Limited.
Gemini Trust Company, LLC.
Payward Canada Inc.
NDAX Canada Inc.
Uphold Worldwide Ltd.
The undertakings for crypto-asset trading platforms came following an announcement in December 2022 by the Canadian Securities Administrator where the regulator announced its plans to strengthen its approach to overseeing crypto trading platforms by expanding existing requirements for platforms operating in Canada.
The December announcement was followed up by a press release in February announcing the publication of a notice that describes enhanced investor protection commitments. Unregistered crypto-asset trading platforms that were operating at the time of the February notice were required to submit a pre-registration undertaking to their primary regulatory authority within 30 days of the notice.
Platforms are committing to enhanced expectations regarding the segregation and custody of crypto assets held on behalf of Canadian clients, as well as prohibitions on margin, credit or other forms of leveraging offers to Canadian clients. Additionally, the CSA requires platforms to seek approval before issuing or making available stablecoins to investors.
Platforms that do not wish to submit an undertaking with the CSA will be expected to take appropriate off-boarding steps to prevent Canadian users from accessing their platform.