The Canadian Securities Administrators (CSA) has extended the deadline for crypto trading platforms to conform to regulations regarding stablecoins. This is the second extension of the stablecoin rule enforcement.
The restrictions on value-referenced crypto assets (VRCAs) were first introduced in February 2023. They prohibited stablecoins that were not backed by a single fiat currency (such as algorithmic stablecoins) as of the end of that year. Trading in stablecoins backed by a single fiat currency (FBCAs) was allowed to continue until new regulations came into force on April 30, 2024.
Willing to wait, open to alternatives
Crypto asset trading platforms reported technical issues in meeting the April 30 deadline, and it was consequently pushed back to October 31. Now the date has been moved to Dec. 31. The CSA stressed that it is open to other mechanisms for meeting its concerns. “The CSA has actively engaged with CTPs [crypto trading platforms] and crypto industry participants,” it said. Furthermore:
“The extension is intended to provide more time for CTPs to either comply with the terms and conditions […] or to propose alternatives that address investor protection concerns, as long as any alternatives are in place […] prior to December 31, 2024. ”
After the end of the year, CTPs will only be allowed to trade in VRCAs “that comply with the conditions of their registration and exemptive relief decisions, or their PRUs [pre-registration undertakings].”
Scaring some away, delighting others
The new crypto regulations led to an exodus of overseas exchanges. Between March and May 2023, OKX,dYdX, Paxos, Bybit and Binance closed up shop in Canada.
At the same time, Kraken voiced its determination to stay in Canada and attain restricted dealer status. Kraken managing director for Canada Mark Greenberg later praised Canadian regulators in an interview with Cointelegraph. “The Canadian regulators have been collaborative, helpful. […] There’s a clear regulatory pathway. It’s allowed us to invest in the country.”
Gemini filed a pre-registration undertaking — the first step to becoming a restricted dealer — in April 2023.
