Canada bans crypto leverage and margin trading after FTX collapse
Authorities in Canada are taking measures to better protect Canadian cryptocurrency investors in the aftermath of the FTX collapse and the spreading contagion.
The Canadian Securities Administrators (CSA), the council of Canada’s provincial and territorial securities regulators, on Dec. 13 issued an update to crypto trading platforms operating in the country.
The CSA said that the authority has been reinforcing its approach to the supervision of crypto trading platforms by expanding existing requirements.
According to the statement, all crypto trading firms operating in Canada — both local and foreign ones — have to comply with newly expanded terms, which ban them from offering margin or leverage trading services to any Canadian clients.
The expanded terms also require crypto exchange services providers in Canada to segregate custody assets from the platform’s proprietary business.
“Custodians will generally be considered qualified if they are regulated by a financial regulator in Canada, the U.S., or a similar jurisdiction with a supervisory regime for conduct and financial regulation,” the CSA noted in the statement.
The council emphasized that even with the adoption of these measures, crypto assets or any financial products related to crypto assets are high-risk investments, urging investors to only invest using a platform that is registered with CSA members.
The CSA did not immediately respond to Cointelegraph’s request for comment.
In the new statement, the CSA mentioned its previous communication to crypto trading platforms operating in Canada, issued on Aug. 15, 2022. The authority stated that it expected commitments from unregistered crypto trading platforms operating in Canada while they pursue registration in the form
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