Canadian securities regulator CSA extended the deadline for exchanges to comply with its stablecoin requirements to the last day of this year.
The Canadian Securities Administrators (CSA), Canada’s consortium of federal and state financial regulators, once again pushed the deadline for crypto trading platforms (CTPs) to comply with its stablecoin regulations.
Source: CSA on X
The first deadline was April 30, but CTPs struggled to meet the CSA’s value-referenced crypto asset (VRCA), or stablecoin, requirements. That made the regulator extend the deadline to October 31. Now, the CSA has pushed it to December 31. It also banned algorithmic stablecoins back in December 2023. CTPs could allow fiat-backed stablecoin trading until April 30 this year.
“Investors have experienced significant harm from the collapse of unregulated VRCAs, other VRCA market disruptions and the activities of unregistered crypto market participants,” the CSA said.
“The extension is intended to provide more time for CTPs to either comply with the terms and conditions of their registration […] or to propose alternatives that address investor protection concerns, as long as any alternatives are in place or substantially finalized prior to December 31, 2024.”
As the calendar turns, CTPs will only be allowed to offer services for “VRCAs that comply with the conditions of their registration and exemptive relief decisions, or their PRUs.” PRUs is the abbreviation of pre-registration undertaking.
Not All Exchanges Want to Deal With Canada’s New Regulations
The CSA’s regulations have been accepted by some and driven away others. Kraken is working to offer its services to Canadian crypto users. It has thus far received a restricted dealer status from the regulator. “There’s a clear regulatory pathway. It’s allowed us to invest in the country,” said Mark Greenberg, Kraken’s managing director for Canada. Gemini also filed to become a restricted dealer in 2023. Binance, Bybit, dYdX, and OKX shut shop in the country between March and May last year.
Exchanges deciding to leave the country consider these regulations more stringent than needed. However, the CSA believes they are necessary to protect investors from the volatility and risks associated with VRCAs and crypto.
To that end, the CSA warned, “Investors are reminded that holding a VRCA or a crypto contract with a CTP does not offer the protections generally afforded to holding regulated deposits. Investors wishing to hold VRCAs risk losing all of their investment, or of having to sell at a loss instead of redeeming directly from the issuer on a 1:1 basis.”
