Canada bans crypto leverage and margin trading after FTX collapse

The Canadian Securities Administrators (CSA), the assembly of Canada's provincial and territorial securities regulators, connected Dec. 13 issued an update to crypto trading platforms operating successful the country.

The CSA said that the authorization has been reinforcing its attack to the supervision of crypto trading platforms by expanding existing requirements.

According to the statement, each crypto trading firms operating successful Canada — some section and overseas ones — person to comply with recently expanded terms, which prohibition them from offering borderline oregon leverage trading services to immoderate Canadian clients.

The expanded presumption besides necessitate crypto speech services providers successful Canada to segregate custody assets from the platform’s proprietary business.

“Custodians volition mostly beryllium considered qualified if they are regulated by a fiscal regulator successful Canada, the U.S., oregon a akin jurisdiction with a supervisory authorities for behaviour and fiscal regulation,” the CSA noted successful the statement.

The assembly emphasized that adjacent with the adoption of these measures, crypto assets oregon immoderate fiscal products related to crypto assets are high-risk investments, urging investors to lone put utilizing a level that is registered with CSA members.

In the statement, the CSA mentioned its erstwhile connection to crypto trading platforms operating successful Canada, issued connected Aug. 15, 2022. The authorization stated that it expected commitments from unregistered crypto trading platforms operating successful Canada portion they prosecute registration successful the signifier of pre-registration undertaking.

The CSA did not instantly respond to Cointelegraph’s petition for comment.

Related: SEC charges erstwhile FTX CEO SBF for defrauding investors a time aft his arrest

The CSA connection came soon aft FTX entered into an statement to purchase the Canadian crypto level Bitvo successful June 2022. FTX primitively planned to usage the acquisition arsenic portion of its planetary enlargement plans. However, Bitvo yet managed to terminate the acquisition by the now-defunct exchange, which allowed the steadfast to proceed operating adjacent aft FTX’s collapse.

Bitvo CEO Pamela Draper told Cointelegraph successful November that the acquisition wasn’t completed due to the fact that the firms were moving to fulfill the closing conditions, the astir important of which was regulatory support from the Alberta Securities Commission.

Authorities successful Canada are taking measures to amended support Canadian cryptocurrency investors successful the aftermath of the FTX illness and the spreading contagion.