Although online exchanges declaring to be registered or verified, the CSA explained that none of them were accepted officially in Canada. The CSA is the governmental structure on regulating securities in Canada. Its jurisdiction is spread over 10 provinces and 3 areas and is responsible for developing a proper framework for securities trading and investor protection. The CSA-published warning urged the Canadian residents to be careful when dealing with cryptocurrency trading platforms, because no operator has the requisite permission to formally conduct trading operations in the country.
We want investors to understand that just because a platform may advertise itself as an exchange, that does not mean the platform is complying with applicable securities regulations.
Any investor with a cryptocurrency exchange account can not be defended according to Canadian securities and investor laws. In the unforeseen scenario that a firm gets shut down, loses its users’ funds, or is attacked, an investor can lose the entire balance they kept with the entity with little recourse available from the CSA or otherwise.
The law informs that any such exchange seeking registration to process as a crypto exchange to service Canadian investors have to ensure “secure handling of client funds, appropriate safekeeping and protection of assets, confidentiality safeguards for personal information, reliable processes for pricing and trading in crypto assets, appropriate investor pre-trade disclosures and measures against market manipulation and other harmful practices.”
The note resembles CSA-published letter in August 2017, that alerted investors about the cryptocurrency prices that could differ from region to region giving rise to arbitrage possibilities. The high arbitrage, however, was estimated by authorities as harmful for retail investors.