March 22, 2019, | AtoZ Markets - The Members of the cryptocurrency community in collaboration with Canadian regulators are actively working on the new Canadian cryptocurrency regulations.
New Canadian cryptocurrency regulation awaits crypto community comments
Last week, the Canadian securities administrators (CSA), together with the Canadian Investment Regulatory Organization (IIROC), published the paper about the “New Proposed Platform” for the public discussion. The platform will adapt existing cryptocurrency regulations to address specific risks and problems associated with them. The local regulators encourage the cryptocurrency holders, the heads of fintech companies, as well as the investors interested in crypto to comment on 22 questions touched in the “New Proposed Platform” document. The goal of the regulator is to get an idea of which rules are most appropriate for the new one. A response from the crypto community is expected until May.
New rules are expected to be better than older crypto regulations
Certain crypto experts question whether the new Canadian cryptocurrency regulation is needed? Most of the questions are focused on how to determine what cryptocurrency exchange is, and how much power the government can have in its attempts to introduce already existing regulatory models in this new industry.
Apparently, Canadian regulators are starting from scratch in terms of understanding how the crypto industry should be regulated. According to them, there are many regulatory “holes” that need to be filled; Several experts pointed to an unclear relationship between cryptocurrency and current legislation on securities.
“Trading non-security tokens on Canadian stock exchanges can be a derivative and still be regulated,” said Matt Burgoyne, a lawyer from Calgary, on his Twitter account. Burgoyn also added that “in the new CSA advisory document on cryptocurrency exchange there is something to unpack. Exchanges must consider whether users create a user contract or futures contract.”
Canadian securities regulators jurisdiction in the crypto space is not clear
Evan Thomas, a lawyer, head of the legal group in Osler, Hoskin & Thomas spoke in one of his interviews touched on one of the main problems with securities. “The problem is that, from a legal point of view, it is not clear that Canadian securities regulators have jurisdiction to regulate platforms for trading bitcoins and other crypto active assets that are not securities,” stated head of the legal group in Osler, Hoskin & Thomas. He concluded :
“To ensure that the CSA does not extend beyond its jurisdiction over the crypto asset industry, we hope that the regulation of the Platform will provide additional clarity regarding the types of crypto assets and related services that are not subject to securities regulation, such as tokens, which are not investment contracts or derivatives and non-prison cryptocurrency wallets. ”
The recent QuadrigaCX elevates governmental concern about crypto regulation
The Canadian government has already held two rounds of discussions regarding cryptos regulations. The same dialog between the cryptocurrency community and the local authorities took place earlier, in 2014 and 2018. It is supposed, that QuadrigaCX is prompted the Canadian government to take action on the digital assets regulation. The aforementioned discussion paper came out a few months after the Canadian cryptocurrency exchange left its users without access to their funds after the sudden death of their CEO, which Atoz Markets has covered earlier. According to some estimates, up to $ 150 million were blocked inside the exchange.
The fact that the exchange was essentially completely unregulated left devastated users without many opportunities for legal appeal. Thus, the cryptocurrency community is putting increasing pressure on the Canadian government to adopt rules that could - at least - prevent something like this in the future.
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