The Staff Notice sets out the position of CSA staff that a platform that does not immediately deliver cryptoassets purchased on the platform to its customers is likely dealing in securities or derivatives. In our view, this interpretation represents a significant departure from CSA Staff’s earlier notices on cryptoassets. Coinsquare had expected, based on the CSA’s consultation paper published in March 2019, that platforms would be regulated under a new legislative framework that would accommodate the differences between cryptoassets and securities and derivatives, while still protecting investors. Our industry is in a period of rapid change where international competition is fierce, and if Canada wants to be a leader, Canadian platforms need to work closely with regulators.
As Timothy Lane, Deputy Governor of the Bank of Canada, recognized in a recent speech, “innovation, competition and consumer choice are good, and… disruption is not the enemy”. Mr. Lane acknowledged in the same speech that cryptocurrencies require a global effort to “understand the wide-ranging implications and ensure the regulatory framework is fit for purpose”.
For further information, please read our letter: Canadian Platform Group letter to CSA re Staff Notice 21-327 March 10, 2020. If you are interested in participating in this initiative, please contact our legal counsel.