Canadian cryptocurrency exchanges must separate user funds from operations cash and stop providing margin traders with leverage going ahead. That is in accordance with new rules established by the Canadian Securities Administrators (CSA), a regional body that serves as a clearinghouse for securities regulators.
In a statement released by the CSA on Monday, cryptocurrency trading platforms will also be obliged to hold the funds of Canadian customers with an "appropriate" licensed custodian. If a custodian is subject to regulation in the US, Canada, or another comparable country, they are regarded as qualified. Crypto trading platforms are being closely monitored by the CSA following recent developments in the sector in Canada.
All traders based in Canada will not be allowed to trade cryptocurrency on margin, including businesses and institutions. Similar action for retail investors is being considered in Singapore, after Sam Bankman-FTX Fried's exchange started to fall apart and eventually filed for bankruptcy.
John J. Ray, the newly appointed CEO of FTX, testified before Congress on Monday that FTX had combined user assets with its sibling trading company Alameda Research in an effort to increase its own revenue. The CSA officials also issued a warning to cryptocurrency exchanges not to support any cryptocurrency that can be regarded as a security, which could include stablecoins, according to the regulators.
The panel stated that it was of the opinion that stablecoins or stablecoin arrangements might be considered securities or derivatives. Although it hasn't specifically specified whether it considers USDT security, the Ontario Securities Commission (OSC), Canada's main financial regulator, last September outright forbade trading platforms operating locally from touching the stablecoin tether.
