Coinsquare's COO shares his thoughts on being Canada's first regulated crypto dealer exchange
Past actions by bad actors have forced regulators across the country to take a tough stance on crypto exchanges.
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It’s a story that still haunts the first generation of Canadian crypto users today. Four years prior, Gerald Cotten, co-founder of QuadrigaCX, then Canada's largest cryptocurrency exchange, died under mysterious circumstances in India. But, before his death, Cotten took virtual keys for digital wallets and moved them to cold storage, resulting in the permanent loss of $190 million in user funds.
The incident sparked a crisis of confidence in the country's emerging crypto industry and made regulators deeply skeptical of blockchain technology. However, old wounds eventually heal. Fast forward to today, and Coinsquare has taken over to become one of the largest crypto exchanges in Canada, with a cumulative trading volume of $8 billion since 2014.
In an interview with Cointelegraph Business Editor Sam Bourgi, Coinsquare Managing Director Eric Richmond explained that a regulatory framework now exists to prevent similar incidents in the future:
“We took a much different approach than the United States. Unlike companies south of the border, all crypto trading platforms here must be registered with the Investment Industry Regulatory Organization of Canada (IIROC). There is a backlog with processing applications at the moment, while ours have been submitted since November 2020, as we wanted to be one of the first regulated players in the market. »
As the regulation only recently came into effect, all crypto exchanges are granted a two-year exemption where they must register with IIROC during this time. Currently, Coinsquare is the only company in the space registered with IIROC. Likewise, the company has a strict set of rules in place when it comes to listing new tokens to ensure that its users don't fall victim to scams:
"We put it through evaluating the underlying technology, marketing, the team behind it, analyzing potential legal issues, irregular price movements, etc...
Past actions by bad actors have forced regulators across the country to take a tough stance on crypto exchanges.
New
It’s a story that still haunts the first generation of Canadian crypto users today. Four years prior, Gerald Cotten, co-founder of QuadrigaCX, then Canada's largest cryptocurrency exchange, died under mysterious circumstances in India. But, before his death, Cotten took virtual keys for digital wallets and moved them to cold storage, resulting in the permanent loss of $190 million in user funds.
The incident sparked a crisis of confidence in the country's emerging crypto industry and made regulators deeply skeptical of blockchain technology. However, old wounds eventually heal. Fast forward to today, and Coinsquare has taken over to become one of the largest crypto exchanges in Canada, with a cumulative trading volume of $8 billion since 2014.
In an interview with Cointelegraph Business Editor Sam Bourgi, Coinsquare Managing Director Eric Richmond explained that a regulatory framework now exists to prevent similar incidents in the future:
“We took a much different approach than the United States. Unlike companies south of the border, all crypto trading platforms here must be registered with the Investment Industry Regulatory Organization of Canada (IIROC). There is a backlog with processing applications at the moment, while ours have been submitted since November 2020, as we wanted to be one of the first regulated players in the market. »
As the regulation only recently came into effect, all crypto exchanges are granted a two-year exemption where they must register with IIROC during this time. Currently, Coinsquare is the only company in the space registered with IIROC. Likewise, the company has a strict set of rules in place when it comes to listing new tokens to ensure that its users don't fall victim to scams:
"We put it through evaluating the underlying technology, marketing, the team behind it, analyzing potential legal issues, irregular price movements, etc...
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