New CSA guidance tackles crypto trading

By James Langton | January 16, 2020 | Last updated on January 16, 2020
2 min read
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The Canadian Securities Administrators (CSA) have published guidance clarifying when crypto trading falls under securities law.

According to the guidance, in cases where the assets being traded are considered securities or derivatives, securities legislation applies to the trading platform. Trickier cases involve trading in assets that aren’t clearly securities or derivatives in their own right.

In its notice, the CSA said that some trading platforms believe that transactions involving cryptoassets that are not derivatives or securities aren’t subject to securities law.

However, the CSA has concluded that platforms that provide a contractual right to an underlying cryptoasset “are generally subject to securities legislation” unless the trade is settled by the immediate delivery of the cryptoasset (which isn’t a security or a derivative).

The CSA’s notice provides guidance on what constitutes immediate delivery, and details a situation where securities legislation does not apply to a crypto platform.

The CSA noted that it is also continuing to analyze feedback to a consultation paper it issued last year with the Investment Industry Regulatory Organization of Canada on developing a regulatory framework for crypto trading platforms. It said it plans to issue guidance on the subject later this year.

“The evolving landscape of the industry prompts us to clarify our regulatory framework so as to better support fintech businesses seeking to offer innovative products, services and applications,” said Louis Morisset, chair of the CSA and president and CEO of the Autorité des marchés financiers.

“As we continue to consider the comments and responses to the consultation we launched last year, the staff notice published today will help platform operators to determine whether their activities are subject to securities legislation,” Morisset added.

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James Langton

James is a senior reporter for and its sister publication, Investment Executive. He has been reporting on regulation, securities law, industry news and more since 1994.