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Bitcoin exchanges in Canada

Following in the footsteps of the United States and Singapore, in August 2017, Canada also announced it will regulate those cryptocurrencies in Initial Coin Offerings (ICOs), which may be considered securities or derivatives. 


In an official notice the staff of the Canadian Securities Administrators (CSA) clarified that with regards to the increase in the number of cryptocurrency offerings (such as ICOs and sales of securities of cryptocurrency investment funds), the public must be aware that some of these involve sales of securities. Therefore, securities laws in Canada will apply if the person or company selling such products from within Canada or if there are Canadian investors. 


In its notice, the Canadian regulator also said that cryptocurrency exchanges (where the tokens created in an ICO can be exchanged for digital coins lime Bitcoin, or for national currencies), might fall within the sphere of securities trading. This means that the said exchanges should be subject to a variety of regulations with regards to whether and when they can be offered to the public.


Canada is one of the many jurisdictions that have been preparing regulation applicable to cryptocurrency exchanges lately, mainly with regards to anti-money laundering, counter-terrorist financing, recordkeeping, transparency and identity verification requirements. The country has been a forerunner in the cryptocurrency sphere, as it has included the term “dealers in virtual currencies” in both its Money Laundering and Terrorist Financing Laws back in 2014. 


Furthermore, some additional requirements may apply to cryptocurrency exchanges in Canada, depending on the province, where they are registered. For example, in Quebec, the Autorité des Marchés Financiers (AMF) requires such exchanges to be licensed as money services businesses.


While no cryptocurrency exchanges have registered with CSA so far, the regulator highlights the need for such exchanges to determine whether the coins they offer constitute “securities” and, if so, to register as a marketplace or get an exemption from registration.


One more thing: investors should be aware that a certain level of counterparty risk is always present when doing business with unregulated companies. If you would rather speculate on the price of Bitcoin with higher leverage provided, it may be better for you to open an account with a forex broker. We could not find an IIROC-licensed broker that offers cryptocurrency trading, but you can try out  XM or IG Group, which should accept Canadian clients.


Bitcoin exchanges in Canada

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Canada FINTRAC, AMF 1:1 Review
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