Canada Will Regulate Crypto Exchanges Following Quadriga Incident

Canada Will Regulate Crypto Exchanges Following Quadriga Incident

 

Canada is planning to ring the changes in the cryptocurrency sphere, following a highly coveted incident with cryptocurrency exchange Quadriga, Reuters reports.

Two regulatory agencies – the Canadian Securities Administrators (CSA) and the Investment Industry Regulatory Organization of Canada (IIROC) – have published a consultation paper titled “Joint Canadian Securities Administrators/Investment Industry Regulatory Organization of Canada”.

The goal of the paper is to “facilitate innovation that benefits investors and our capital markets while ensuring that we have the appropriate tools and understanding to keep pace with evolving markets”.

The paper has been published a couple of weeks after the crypto community witnessed an incident with the Canada-based cryptocurrency exchange Quadriga. Newconomy reported that wife of Gerry Cotten, the founder and CEO of Quadriga who died at age 30, filed a request for court protection from the creditors as she is unable to access funds. Allegedly, her late husband took the passwords to unlock funds to his grave.

As reported then, the court filing stated that Quadriga owes around $190 million to its customers, while it has access to approximately $30 million in bank drafts. A couple of days later, a report on social media claimed that Quadriga’s Litecoin cold wallet addresses have been found, and they show that the funds are being moved out of the cold storage.

In order to improve the legislative framework which regulates the work of crypto exchanges, Canadian authorities have now moved forward in order to “to seek feedback from the financial technology (fintech) community, market participants, investors, and other stakeholders.”

The received feedback will be taken into account in the process of establishing the legal framework to regulate the work of cryptocurrency platforms and exchanges. As the report notes, currently there are “no Platforms recognized as an exchange or otherwise authorized to operate as a marketplace or dealer in Canada”. The result of this process may prove to be the emergence of the first licensed cryptocurrency exchange in Canada.