Crypto trading platforms in Canada can no longer offer leverage to their clients and must segregate their assets with a proper custodian.
With FTX’s collapse spurring global regulators into action against the crypto industry, the Canadian Securities Administrators (CSA) are no exception.
On Monday, the association announced an expanded ruleset pertaining to crypto trading platforms in Canada, which would bar them from offering margin or leverage trading to Canadian clients.
No More Leverage
As announced by the regulator on Wednesday, its new rules will apply to any platform within the country subject to securities legislation, including crypto trading platforms that are yet to register.
Unregistered platforms will soon be given a deadline by which they must submit a pre-registration undertaking (PRU) to its principal regulator, in which it promises to comply with the requirements expected of already registered entities. If they don’t, they may face enforcement action.
The expanded terms for compliant platforms include requirements to keep Canadian clients’ assets held with an “appropriate custodian,” and to segregate those assets from the company’s proprietary business. They also prohibit “offering margin or leverage for any Canadian client.”