The Canadian Securities Administrators (CSA) has extended its deadline yet again to December 31, 2024, so that crypto asset trading platforms (CTPs) that have not registered or provided a pre-registration undertaking (PRU) have until that date to allow clients to buy, deposit, or enter into crypto contracts to buy or deposit value-referenced crypto assets (VRCAs, commonly referred to as stablecoins).
The CSA continues to note that investors have experienced significant harm from the collapse of unregulated VRCAs, other VRCA market disruptions and the activities of unregistered crypto market participants. While other international jurisdictions are developing payment-based, banking-based or hybrid regulatory regimes for certain types of VRCAs, no such regulated VRCAs are being traded in Canada and the CSA is not aware of any initiative to develop similar regulatory regimes in Canada.
The amended timeline follows the publication in 2023 of CSA Staff Notice 21-333 Crypto Asset Trading Platforms: Terms and Conditions for Trading Value-Referenced Crypto Assets with Clients (2023 Staff Notice), acknowledging that certain VRCAs may be useful to Canadian clients of CTPs, especially those VCRAs that are referenced to the value of a single fiat currency (e.g. fiat-backed crypto assets, stablecoins, FBCAs). The 2023 Staff Notice described terms and conditions that would address the CSA’s investor protection concerns.
The 2023 Staff Notice included a deadline of April 30, 2024, since extended to October 31, 2024, after which CTPs would no longer allow clients to buy, deposit, or enter into crypto contracts to buy or deposit FBCAs that do not comply with the terms and conditions of the 2023 Staff Notice. The new deadline of December 31, 2024 (the new deadline) is intended to provide more time for CTPs to either comply with the terms and conditions of their registration and exemptive relief decisions, or their PRUs, or to propose alternatives that address investor protection concerns, as long as they are in place or substantially finalized before the new deadline.
CSA Staff Notice 21-333 Crypto Asset Trading Platforms: Terms and Conditions for Trading Value-Referenced Crypto Assets with Clients is available for download from the website of the Canadian Securities Administrators.
For more information, please call Barbara Hendrickson at BAX Securities Law (647) 403-4606.
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