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August 26th, 2025
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All Crypto Exchanges to Register as Investment Dealers
Crypto Regulation | Aug 12, 2024
Image: Freepik
CSA Announces All Crypto Exchange Platforms (CTPs) Must Diligently Work Towards Investment Dealer Registration
The Canadian Securities Administrators (CSA) announced on August 6, 2024 that the "interim approach for time-limited restricted dealer registration" for CTPs would be discontinued. With the termination of this status, the CSA now requires all CTPs to register as full investment dealers and join CIRO, the self-regulated, Canadian Investment Regulatory Organization. Previously, under the restricted dealer approach, crypto exchanges were able to operate with fewer restrictions while they worked towards full registration. Those days have now passed. Here's a list of crypto exchanges working with the CSA that are allowed to do business with Canadians.
The Evolution of Crypto Trading Platform Regulation in Canada
Canadian regulators have worked alongside industry over many years to learn, adapt where required while protecting investors and ensuring market stability. This was a multi-year long process that continues to evolve.
2017-2019 - Initial Regulatory Guidance
When the CSA released its initial guidelines on the applicability of securities rules to cryptocurrency trading platforms in 2017, it was the first major action taken by Canadian regulators to address the rapidly expanding cryptocurrency business. According to these guidelines, any platform that allows users to trade cryptocurrencies that are either securities or derivatives needs to abide by Canadian securities rules.
See: Canada’s Proposed Mutual Fund Crypto Regulations 2024
In 2019, Consultation Paper 21-402 (NCFA comments) was released by the CSA and the Investment Industry Regulatory Organization of Canada (IIROC). In order to facilitate trading in cryptocurrency assets that are categorized as securities, platforms must register as securities dealers, according to the regulatory framework for CTPs that was presented in this paper.
2020-2022 - Introduction of Pre-Registration Undertakings (PRUs)
During this period, the CSA also issued Staff Notice 21-327 (2020) and Staff Notice 21-329 (2021), providing further guidance on the application of securities legislation to CTPs. These notices highlighted the importance of safeguarding client assets, maintaining robust compliance systems, and managing risks associated with trading crypto assets.
Pre-Registration Undertakings (PRUs) were announced by the CSA in 2022 to help CTPs comply with regulations while maintaining their operational capacity. While their requests for full registration were being handled, these PRUs obliged unregistered CTPs to comply with a series of securities laws and remain compliant. As the sector developed, this phase was essential in creating a level of regulatory supervision.
2023 - Enhanced Oversight and Stablecoin Regulation
In 2023, crypto regs in Canada tightened further around stablecoins which were called Value-Referenced Crypto Assets (VRCAs) by Canadian regulators. The CSA made it clear that VRCA that are tethered to fiat currencies or other assets are considered securities or derivatives. CTPs had to obtain express permission from the CSA before permitting trading in VRCAs.
See: Canada to Enforce Cryptoasset Reporting by 2027
The CSA also published Staff Notice 21-332 in 2023, with further conditions for CTPs operating on a pre-registered status that required them to separate client assets in trust accounts from their own to protect investors in case of insolvency.
2024 - End Restricted Dealer Approach and Transition to Full Investment Dealer Registration Requirement
On Aug 6, 2024, the CSA and CIRO released a statement announcing that all CTPs facilitating crypto asset trading should prioritize registering as an investment dealer and to become members of CIRO. The step to register as an investment dealer has strict compliance requirements, such as minimum capital on-hand and reliable and robust risk management systems to safeguard and protect client assets. CTPs must complete registration in a prioritized manner, historically within two (2) years, and maintain active communications with CIRO during the transition to ensure they comply with all regulations. *Advised to consult a securities lawyer.
Outlook
By requiring CTPs to register as investment dealers and become members of CIRO, Canadian regulators are imposing strict operating requirements to protect the integrity of Canadian financial markets and investors, as crypto continues to go mainstream.
See: WEF Insights On Coordinating Global Crypto Regulation
The National Crowdfunding & Fintech Association (NCFA Canada) remains committed to supporting this regulatory transition and fostering innovation within the fintech sector. By providing education, market intelligence, and networking opportunities, NCFA continues to play a key role in shaping a vibrant and sustainable financial ecosystem in Canada. *If you have questions and would like to speak to a securities lawyer, get in touch: info@ncfacanada.org.
The National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, artificial intelligence, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org
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