Canada Securities Administrators (CSA) Releases New Crypto Guidelines

• Unlike the US SEC, Canada is acknowledging the benefits of crypto and Bitcoin.
• The CSA has made clear its views and expectations with respect to staking cryptocurrencies.

The Canada Securities Administrators (CSA) have issued new rules for investment funds that hold or intend to engage in crypto assets, focusing particularly on meeting the requirements of securities legislation.

Unlike the US SEC, Canada is acknowledging the benefits of crypto and Bitcoin and is progressively loosening restrictions on investment in crypto assets. In the following months, major crypto events such as the 2023 Blockchain Futurist Conference and ETHToronto will take place.

Complying With Current Framework

The April 2020 issuance of a Canadian public crypto asset fund made it possible to establish a non-redeemable investment vehicle whose only holding is Bitcoin (BTC). There are now 22 Public Crypto Asset Funds in Canada, managing a total of $2.86 billion in assets as of April 30th, 2023.

Moreover, the Canadian Securities Administrators (CSA) issued recommendations on how crypto asset investment funds could comply with the current securities regulatory framework. The CSA has also made clear its views and expectations with respect to staking cryptocurrencies, crypto custodians, and the purchase of cryptocurrencies other than Bitcoin and Ethereum.

According to the CSA, fund managers should ensure that there is an active market for the cryptocurrency asset, the cryptocurrency asset has a regulated futures market, and indices for the cryptocurrency asset are accessible from a regulated index provider. There ought to be a lot of people buying and selling it.

The Canadian Securities Administrators (CSA) suggested adopting publicly accessible indexes that aggregate prices from many sources to generate a spot price of a crypto asset, as this “will help mitigate the risks of inaccurate pricing of a particular asset.”

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