Canada Crypto Exchanges Rush as CIRO Membership Deadline Nears
Canada’s regulators have provided the CTPs with a deadline to complete their applications for Investment Dealer status and membership with Canadian Investment Regulatory Organization (CIRO).
This push comes at the end of the previously allowed transitional period when Canadian crypto trading platforms (CTPs) are expected to meet established financial regulatory standards.
Deadline Approaches for Canada Crypto Exchanges
With the CIRO membership deadline fast approaching Canadian CTPs are rushing to ensure that their business practices meet with the necessary legal standards. The CSA and CIRO have recently sent out reminders to these platforms noting the need to move from being restricted dealers to fully recognized investment dealers.
This is of paramount importance for CTPs as they will preserve their legal status in the context of the financial market of Canada.
In a staff notice that was released in march 2021, it was made known that CTPs were given a temporary period of time within which they could offer their products while seeking for full authorization.
Nevertheless, as stated by the CSA,
“Given the time that has elapsed, CSA members expect that CTPs would have thoroughly assessed and understood the requirements for registration as investment dealers and CIRO members and be working closely with CIRO on their applications.”
Regulatory Compliance Urged
This is not a new thing as more organizations are being forced to adhere to the set regulations. Formerly, the CSA and CIRO have given some recommendations and have also offered an interim measure which gave some lenient stance on the operations of crypto exchanges.
However, this approach is now being phased out with clear expectations set for CTPs to meet the full requirements of CIRO membership.
According to these provisions, some of the platforms have been compliant, for instance, Coinsquare has transitioned and had CIRO membership. Some other platforms, however, have decided to withdraw from the Canadian market instead of adhering to the strict rules, which also speaks to the heterogeneity of the industry’s approaches.
Next Steps for Crypto Exchanges
This move comes after a series of events that the Canadian authorities have taken to enhance the regulation of the market particularly after the occurrences that led to the collapse of many blockchain companies.
This strong approach of CIRO and the CSA is to contribute to the creation of a safer and more controlled space for the Canada crypto investors.
CTPs are now expected to provide comprehensive application and prove their operational preparedness, financial fitness, and compliance with CIRO’s standards. Concurrently, CIRO has developed a Readiness Questionnaire to help platforms determine their level of readiness for the joining CIRO. This is part of the screening done by CIRO to make sure that the platforms that are admitted to the membership are capable and meet set legal requirements.
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