Crypto Regulation in Canada: Bitcoin ETFs, Strict Licensing, and the Digital Dollar

The first and last major attempt to encourage a comprehensive encryption framework was buried in the House of Commons on November 23. Analysis

In October, Toronto-based Coinsquare became the first crypto trading company to obtain broker registration with the Investment Industry Regulatory Organization of Canada (IIROC). This means a lot, as Coinsquare investor funds now benefit from the safety of the Canadian Investment Protection Fund in the event of insolvency, while the exchange is required to regularly report its financial situation.

This news reminds us of the peculiarities of Canadian crypto regulation. While the country still maintains a fairly strict licensing process for virtual asset providers, it surpasses neighboring United States in its experiments with crypto exchange-traded funds (ETFs), pension fund investments, and central bank digital currency (CBDC) efforts. /p> An era of restricted dealers

Coinsquare, which happens to be the oldest crypto asset exchange in Canada, benefits from its new legal status as none of its competitors can currently boast of having the same legal footing. At the time of publication, all other local players must have "dealer-restricted" status, signaling that they have made their listing offer and are now awaiting IIROC's decision.

The guidelines for crypto-asset trading platforms were introduced by IIROC and the Canadian Securities Administrators (CSA) in 2021. They require crypto businesses dealing in security tokens or contracts companies register as "Investment Brokers" or "Regulated Markets".

All local businesses have been given a two-year transition period, during which they must begin the registration process and, in some cases, obtain temporary "restricted reseller" registration.

The list of "restricted resellers" who have been granted a two-year relief period to operate under the current registration process is rather short and mainly includes local businesses, such as Coinberry, BitBuy , Netcoins, Virgo CX and others. These companies still benefit from the right to facilitate the buying, selling and holding of crypto assets, but what awaits them is the strict compliance procedure necessary to continue their operations after 2023. For example...