Crypto platforms seeking registration in Canada will face stricter rules and regulations, according to an announcement by the Canadian Securities Administrators (CSA) on Monday.
Under the expanded terms, crypto platforms operating in Canada will be prohibited from offering margin and leverage trading to their clients. In addition, these platforms will be required to hold the assets of Canadian clients separately from their own proprietary businesses.
The CSA’s decision to tighten regulations for crypto platforms is part of an effort to protect investors and enhance the integrity of Canada’s capital markets. By banning margin and leverage trading, the CSA aims to reduce the potential for excessive risk-taking and financial losses on the part of investors.
Furthermore, the requirement for platforms to hold the assets of Canadian clients separately is intended to ensure that these assets are safe and secure and not subject to any potential conflicts of interest on the part of the platform operator.
Canadian authorities have generally taken a skeptical view of cryptocurrencies, with Prime Minister Justin Trudeau attacking those who promote “questionable, reckless economic ideas” when it comes to crypto. The country’s central bank has also warned that Bitcoin and other tokens are not a way to “opt-out of inflation.”
Trudeau’s comments came in response to a question about the potential benefits of cryptocurrencies, which he dismissed as “risky and dangerous” investments. He also expressed concern about the use of cryptocurrencies for illegal activities, such as money laundering and terrorism financing.
The Bank of Canada, meanwhile, has issued repeated warnings about the risks associated with investing in cryptocurrencies. In a statement last month, the bank reiterated that cryptocurrencies are not legal tender and warned that their value could be highly volatile and subject to sudden changes.
Despite these warnings, however, interest in cryptocurrencies continues to grow in Canada. According to a recent survey by the Bank of Canada, nearly 13% of Canadians own bitcoins, with many citing the potential for high returns and the ability to bypass traditional financial institutions as key reasons for their interest.
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