Canadian Crypto Trading Platforms Running Out of Time to Get Their Paperwork In

CTPs treated like their traditional colleagues. New CTPs will not be given an interim period before CIRO membership

Crypto trading platforms (CTPs) in Canada have been given a final reminder to submit their applications to become full-fledged investment dealers and members of the Canadian securities industry’s self-regulatory organization.

In a news release on Monday, the Canadian Investment Regulatory Organization (CIRO) and Canadian Securities Administrators (CSA) highlighted that CTPs have until March 31 to join the self-regulatory organization.

According to the regulators, new CTPs will not be granted an interim period before CIRO membership, as was previously permitted. In addition to obtaining CIRO membership, CTPs are also required to register in individual jurisdictions.

Currently, there are 15 CTPs operating in Canada. Among them, Coinsquare became the first to gain IIROC (now known as CIRO) membership. The crypto exchange applied for membership in November 2020 and was notified of its approval in October 2022.

The CSA first began establishing pre-registration requirements for CTPs in August 2022, initially focusing on collecting undertakings — binding agreements — on customer protections.

However, their stance shifted significantly in a second notice in February 2023, reflecting a heightened caution following the failures of several crypto firms during the bear market. The second set of requirements placed particular emphasis on stablecoins.

In response to the new regulatory regime, some crypto exchanges have taken different approaches. While Kraken and Gemini moved swiftly to comply with the requirements, others, including OKX, dYdX, Paxos, ByBit and Binance, announced their exits from the Canadian market.

The CSA also issued guidance for investment firms holding crypto in July 2023 and further expanded on that guidance in a proposal in January. Notably, Canada has had spot Bitcoin ETFs since 2021.