After QuadrigaCX: New Regulations for Canadian Exchanges Are in the Works
Jessie Willms's original article for bitcoinmagazine.com reduced by 56%
As anxiety grows around every new twist and turn in the ongoing QuadrigaCX drama, along with extensive QuadrigaCX media coverage, Canada's mainstream media has been calling on the government to bring in better oversight and regulation of cryptocurrency businesses, especially cryptocurrency exchanges. In response to these calls for more regulation and calls from some crypto businesses for more regulatory clarity, the Canadian Securities Administrators and the Investment Industry Regulatory Organization of Canada released a discussion paper on March 14, 2019, with a "New Proposed Platform Framework" that would aim to specifically tailor regulations to the special risks posed by cryptocurrency exchanges. The CSA consultation paper, which can be viewed here, asks 22 questions and requests comments from crypto/fintech companies, market participants/investors and other crypto stakeholders about what regulations would best fit in the unique new cryptocurrency marketplace.
The Canadian government has conducted two previous consultation rounds with the cryptocurrency industry but Thomas, who is cautiously optimistic, notes that this new initiative is a more direct response to cases like that of QuadrigaCX. "Earlier regulation was directed at combating money laundering and terrorist financing. This proposed framework is motivated by investor protection concerns; that is, trying to protect crypto users who use custodial exchanges from risks like hacking, embezzlement and market manipulation," Thomas explained.
It's an interesting question whether the proposed regulations in the discussion paper would have prevented what happened at QuadrigaCX - and the answer is likely no. The proposed regulations will apply to crypto platforms located in Canada, as well as foreign platforms with Canadian participants, which might be eligible for exemptions if they are appropriately regulated in their home jurisdiction. The CSA is a federal government agency coordinating financial regulations for Canadian capital markets and IIROC is the industry's self-regulatory organization that oversees investment dealers in Canada's debt and equity markets.
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Summarised crypto news.