A leading regulator in Canada has announced that it will continue seeking to enhance legislation which regulates cryptocurrencies.
The Canadian Securities Administrators (CSA) has written in its 2019 to 2022 business plan that it will look at the rules around exchanges, disclosure requirements and more.
It has acknowledged that the current status of crypto trading leaves all the risk to the customer.
However, there have been a number of crypto scams in Canada in recent months.
In recent weeks, it has been revealed that the late founder of a Canadian crypto firm was responsible for siphoning off cash sent to him by investors and using it for his own crypto trading purposes.
Incidents involving crypto ATM fraud have also occurred. One group of alleged crypto ATM thieves in the country’s largest city, Toronto, are believed to have stolen a six-figure sum of money over a period of just 10 days.
As a result, the Canadian authorities are now believed to be considering an approach to these problems.
In its business plan, the CSA sets out a number of concrete steps that it intends to take. First off, it says, it needs to work out what the exact problems are.
It intends to identify “the emerging regulatory issues related to technology that require regulatory action or clarity”, it said.
It will also “continue research and propose, if appropriate, custodial requirements for registrants and investment funds that facilitate custody solutions for the trading and holding of regulated crypto-securities”.
In a move that may spook some crypto investors, it will look in particular at “disclosure requirements” in the context of crypto businesses.
It said it would “analyze whether there are specific characteristics that warrant a more tailored approach to capital raising and disclosure requirements when cryptoassets such as tokens or coins are used to raise funds for various types of enterprises”.
Each of Canada’s provinces has the right to vary the rules around financial services, but the CSA attempts to bring all of these diverse rules together, meaning that any change in the rules is likely to affect Canadian crypto users across the board.
The plan also encompasses potential changes to the rules around crypto exchanges.
It highlights a perceived risk that exchanges can go too far in shaping the behaviour and performance of the crypto market, and that this may need to be reined in.
“Exchanges play a significant role in ensuring market integrity in the listed issuer context and are often the initial gatekeepers in deciding issues that affect our markets”, it says.
“The CSA will consider whether the current approach for certain issuer-related decisions made in the public interest remain the most effective and efficient way for regulating the Canadian markets”, it added.
The CSA is comprised of each regulator from the ten provinces of Canada as well as its three territories, reflecting the federal nature of the Canadian system.
It releases news on topics of importance to the markets, and designs factsheets and other resources designed to protect investors from fraud.
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Cybercrime still on the rise – be wary of potential scams
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