Canada Bans Margin Trading after FTX Crash
2022.12.13 09:16
Canada Bans Margin Trading after FTX Crash
Budrigannews.com – Canadian authorities are implementing measures to better protect Canadian cryptocurrency investors following the collapse of FTX and its spread.
An update for crypto trading platforms currently in use in Canada was published on December 13 by the Canadian Securities Administrators (CSA), a council of provincial and territorial securities regulators.
The CSA claims that the authority has been strengthening its approach to monitoring cryptocurrency trading platforms by expanding existing requirements.
According to the statement, all crypto trading firms in Canada, both domestic and international, are required to abide by newly expanded terms that forbid them from providing Canadian clients with margin or leverage trading services.
The expanded terms also require Canadian providers of crypto exchange services to separate custody assets from the platform’s proprietary business.
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“Custodians will generally be considered qualified if they are regulated by a financial regulator in Canada, the United States, or a similar jurisdiction with a supervisory regime for conduct and financial regulation,” reads the statement from the CSA.
Investors should only use a platform that is registered with CSA members, as the council emphasized that investing in crypto assets or any financial products associated with crypto assets still carries a high level of risk.
Cointelegraph inquired about the CSA’s response, but the organization did not immediately respond.
In the new statement, the CSA mentioned a previous message it sent to Canadian crypto trading platforms on August 15, 2022. The power expressed that it expected pre-enrollment responsibilities from unregistered cryptographic money exchanging stages working in Canada while they seek after enlistment.
Shortly after FTX agreed in June 2022 to purchase the Canadian crypto platform Bitvo, the CSA communicated with them. Initial plans called for the acquisition to be used as part of FTX’s plans for global expansion. However, Bitvo was ultimately able to stop the acquisition by the now-defunct exchange, allowing the business to continue operating after FTX failed.
Pamela Draper, CEO of Bitvo, disclosed to Cointelegraph in November that the businesses were working to fulfill the closing conditions, the most crucial of which was regulatory approval from the Alberta Securities Commission. Accordingly, the securing was not finished.
