On April 7, 2021, the British Columbia Securities Commission (BCSC) published BC Notice 2021/02 Clarification of Requirements for Crypto Asset Trading Platforms Vancouver – to clarify expectations for crypto asset trading platforms (platforms) (Notice) operating in British Columbia in light of Joint Staff Notice 21-329, Guidance for Crypto-Asset Trading Platforms: Compliance with Regulatory Requirements (CSA Staff Notice 21-329), issued March 29, 2021 by the Canadian Securities Administrators (CSA) and the Investment Industry Regulatory Organization of Canada (IIROC).

The Notice provides that platforms headquartered in British Columbia that facilitate trading in crypto assets that are securities or derivatives, or in instruments or contracts based on crypto assets, are required to contact the BCSC to ensure appropriate regulatory authorization.

The Notice also refers to CSA Staff Notice 21-327 Guidance on the Application of Securities Legislation to Entities Facilitating the Trading of Crypto Assets for more guidance.

For platforms operating in British Columbia but headquartered in another Canadian province or territory, the Notice states that the platform is required to communicate with its principal securities regulator in that jurisdiction.

The Notice suggests that platforms based outside of Canada, but dealing with Canadians, should reach out to the Canadian jurisdiction with which it has the most significant connection.

According to the Notice, the BCSC remains flexible and will consider a range of potential regulatory solutions to find an appropriate resolution for each platform. One option, according to the Notice, is pursuing membership with IIROC but the BCSC will also consider other regulatory arrangements where warranted, such as tailored exemptive relief, that do not require IIROC membership.

Platforms operating in British Columbia should consult with their legal counsel and contact the BCSC on the appropriate steps to comply with securities legislation, as applicable. CSA Staff Notice 21-329 provides guidance on securities law requirements applicable to platforms.

The Notice warns that the BCSC will pursue enforcement action against platforms that are not complying with securities regulations.

For a full copy of the Notice: https://www.bcsc.bc.ca/-/media/PWS/New-Resources/Securities-Law/Instruments-and-Policies/BCN/BCN-202102-April-7-2021.pdf

For more information, please call Barbara Hendrickson at BAX Securities Law (647) 403-4606.

This publication is not intended to constitute legal advice. No one should act on it or refrain from acting on it without consulting with a lawyer. BAX does not warrant or guarantee the accuracy or currency or completeness of the publication. No part of this publication may be reproduced without the prior written permission of BAX Securities Law.