Virtual Currency Regulation in Canada: The Legal and Regulatory Framework for 2023
More than 350 fraudulent cryptocurrency tokens were created per day this year, defrauding millions of investors, according to blockchain risk monitoring firm Solidus Labs.
Karsten Wenzlaff, Advisor
August 26th, 2025
Karsten Wenzlaff is a Crowdfunding and Fintech Expert from Germany. He is Secretary-General of Digit[...]
Category Archives: Blockchain, Crypto, Digital Assets Regulations
Everything You Need to Know About Crypto License
Jan 5, 2023
Bitcoin, Cryptocurrency, Currency by anncapictures is licensed under Pixabay
Cryptocurrencies and blockchain technology have revolutionized the way we handle financial transactions. As the demand for digital assets increases, so does the need for a secure and regulated environment where these transactions can take place. A crypto license is a permit granted by government agencies to businesses that wish to enter the cryptocurrency market as legitimate businesses. This article will discuss the basics of a crypto license, how to get one, and why it is important. Let's get started.
What is a Crypto License?
A Crypto License is a digital license issued by the government or financial regulator that grants companies specialized rights to operate in cryptocurrency. For instance, a UK FCA crypto license allows companies to offer crypto services such as trading, transferring, and exchanging digital assets like cryptocurrency. A Crypto License also provides legal protection for companies conducting business with Bitcoin or other virtual currencies.
Companies or individuals requiring this license must meet certain criteria to be eligible. These requirements usually include demonstrating the ability to provide secure storage and processing of digital assets, having adequate capital and risk management procedures in place, and showing a commitment to compliance with anti-money laundering regulations.
What Do Crypto Licenses Allow Companies To Do?
Crypto licenses give companies the right to provide services related to buying, selling, transferring, and exchanging digital assets such as cryptocurrency. This includes offering custodial services or creating trading platforms for investors.
Depending on the type of license issued, companies may also be able to facilitate blockchain-based token sales or initial coin offerings (ICOs). However, such may differ between countries, so companies should check with their local financial regulator for specific details.
How do I Get a Crypto License?
To get a crypto license, companies must meet the requirements of the local financial regulator. This usually involves completing an application form, providing evidence of adequate capital and risk management procedures, demonstrating technical competence in handling digital assets, and giving proof of commitment to complying with relevant anti-money laundering regulations
The processing time for such applications can take anywhere from several weeks to a few months, depending on the complexity of the application and the financial regulator's workload. Also, this varies between countries, so companies should check with their local regulator for details. For instance, the Financial Conduct Authority in the UK has a straightforward process for applying for a crypto license.
Why Do Companies Need A Crypto License?
Crypto licenses are essential for businesses that wish to operate in the cryptocurrency industry. Without one, companies could be violating local financial regulations and face fines or other legal repercussions
In addition, crypto licenses provide companies with the legal protection they need to offer services related to cryptocurrency. Without this, companies could be exposed to financial losses or other risks associated with digital assets
Crypto licenses also help boost investor confidence by ensuring that the company is compliant with local financial regulations and has adequate security measures to protect customers' funds and data.
Benefits of Crypto Licenses
Various benefits come up with obtaining a crypto license. These include:
- Better investor confidence: By obtaining a crypto license, companies can demonstrate their commitment to compliance with local regulations and show that they have adequate security measures in place to protect customers' funds and data.
- Protection from risks: With a crypto license, companies have legal protection should any issues arise with digital assets or cryptocurrency trading.
- Increased credibility: Having a crypto license can help companies stand out from the competition and attract more customers. For instance, investors may be more likely to trust a company that is licensed than one that is not.
How to Know if A Crypto License Is Right For You?
Before you decide to apply for a crypto license, there are several factors that you should consider. These include the cost, time commitment, and complexity of the process. It's also important to ensure you meet all the necessary criteria before submitting your application.
If you believe that obtaining a crypto license is your business's best course of action, then it's important to do your research and understand all the requirements. This will help ensure you get the most out of the process and minimize potential risks.
Lastly, it's important to note that the requirements for obtaining a crypto license may differ between countries. Therefore, you should check with your local financial regulator for specific details and ensure you understand all the implications before applying.
See: Crypto and DeFi: Understanding the Risk Landscape and Tackling the Shifting Outlook
Obtaining a crypto license is an important step for companies that wish to operate in the cryptocurrency industry as legitimate businesses. It helps protect companies from financial risks, increases credibility and investor confidence, and provides legal protection should any issues arise with digital assets or cryptocurrency trading. Before applying for a crypto license, you must understand all the requirements and ensure you meet them. Additionally, companies should check with their local financial regulator for specific details on the application process. With the right preparation, a crypto license can help your company grow and succeed in cryptocurrency.
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, 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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Stikeman Elliot: 2023 Virtual Currency Regulatory Framework in Canada
Stikeman Elliot | Ramandeep K. Grewal, Alix d'Anglejan-Chatillon, Éric Lévesque, Christian Vieira | Nov 7, 2022
Virtual Currency Regulation in Canada: The Legal and Regulatory Framework for 2023
Four Stikeman Elliott lawyers recently updated the Canada chapter of The Virtual Currency Regulations (5th edition), published by Law Business Research Ltd. This chapter provides an excellent overview of the rapidly developing area of law in Canada, focusing on the following topics:
- Introduction to the Legal and Regulatory Framework
- Anti-Money Laundering
- Other Legislative Requirements
- Criminal and Civil Fraud Enforcement
- Tax
- Regulation of Miners
Download the 12 page PDF --> here
Stikeman Elliot | Alix d'Anglejan-Chatillon, Ramandeep K. Grewal, Éric Lévesque | Nov 1, 2022
Blockchain and Cryptocurrency: Understanding Canada’s Regulatory Regime
Three partners from our Toronto and Montreal offices recently updated the Canada chapter of the Blockchain & Cryptocurrency Regulations 2023, published by Global Legal Insights. This chapter provides an excellent overview of the rapidly developing area of law in Canada, focusing on the following topics:
- Cryptocurrency regulation
- Sales regulation
- Ownership and licensing requirements
- Promotion and testing
- Money transmission laws and anti-money laundering requirements
- Reporting requirements
- Border restrictions
- Mining
- Taxation
- Other Canadian legislative requirements
Download the 11 page PDF --> here
Stikeman Elliot | Sep 8, 2022
General introduction to the regulation of virtual currencies in Canada
Download the 8 page PDF 'Law Reviews' --> here
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, 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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Politico: Fintech Scandals Derail Momentum in Washington
Politico | Zachary Warmbrodt | Jan 3, 2023
Image: Unsplash/Rythik
This was supposed to be fintech’s big year in Washington [but ] the series of scandals that emerged in late 2022 are derailing that momentum, putting the once-ascendant challengers to traditional banks on defense.
- Crypto winter continues — Americans are getting bad news every day about the integrity of the cryptocurrency industry, with executives now openly accusing each other of wrongdoing following the FTX fraud scandal and market crash. Some lawmakers who bought into crypto’s potential are starting to voice mea culpas. Long-time skeptics are emboldened.
- FTX founder Sam Bankman-Fried’s expected not-guilty plea to sweeping criminal charges. Expect more damning revelations as the government makes its case against Bankman-Fried and other FTX and Alameda Research executives who were once the digital currency world’s leading ambassadors in Washington.
See: Will Global Regulation See Bitcoin Surge in 2023?
- Federal prosecutors revealed over the holiday break that bankrupt digital asset lender Voyager Digital may be the focus of a CFIUS review — an interagency process designed to police foreign investment in U.S. companies. Why does it matter? Binance.US — the domestic affiliate of the behemoth international crypto exchange Binance — is making a bid to acquire Voyager. It underscores how Binance is primed for greater Washington scrutiny for a host of reasons.
- The SBA in 2022 moved to let fintechs take on a bigger role in its flagship non-emergency lending program. But those firms are facing new investigations and political backlash after the House coronavirus subcommittee outlined in December how a number of the companies exposed the Paycheck Protection Program to fraud.
- Regulators are under pressure — While all of this casts a pall over fintech on Capitol Hill, it more importantly means that Biden appointees at key regulatory agencies have a new mandate to crack down. Treasury in a November report called for greater oversight of fintechs in the consumer space.
Continue to the full article --> here
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, 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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B.C. Government Temporarily Suspends Requests for Electricity Connections from Crypto Miners
Today in BC | Canadian Press | Dec 21, 2022
Image: Unsplash/Fré Sonneveld
18-month suspension to give province and BC Hydro time to engage with industry and First Nations
- The British Columbia government is temporarily suspending requests for electricity connections from cryptocurrency mining operations, saying the decision is aimed at preserving the power supply while supporting climate action and economic goals.
- A statement from the Ministry of Energy, Mines and Low Carbon Innovation says 21 cryptocurrency projects are requesting a total of 1,403 megawatts, enough to power about 570,000 homes per year, or 2.1 million electric vehicles.
- It says the 18-month suspension will give the province and BC Hydro time to engage with industry and First Nations as a permanent framework for cryptocurrency operations is developed.
See: Canada: Release Of Draft Tax Legislation For Consultation including GST/HST for Crypto Mining
- B.C.’s electricity is generated almost entirely by hydropower, and the province says it has attracted “unprecedented interest” from cryptocurrency miners.
- The statement says seven operational cryptocurrency mining projects and six more projects that are well advanced in the connection process won’t be affected by the suspension. Their consumption totals 273 megawatts.
Continue to the full article --> here
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, 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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Linklaters: Crypto and DeFi: Understanding the Risk Landscape and Tackling the Shifting Outlook
Linklaters | Martyn Hopper | Dec 20, 2022
Credit: Linklaters
The digital asset market as a whole is experiencing turbulence. In the past year institutional investors have increasingly embraced crypto and other digital assets in their portfolios. As is often the case in distressed markets, there are now signs of a “flight to quality”.
- The decentralised finance (DeFi) space remains nascent, and faces challenges to be addressed over time.
- In light of some of the recent disruptive market events and apparent frauds involving arguably trusted, centralised crypto projects and entities, some point to DeFi’s potential for transparency and disclosure as a potential bright spot for the industry.
See: BoE Speech by Carolyn Wilkins on DeFi Governance Limits and Opportunities: Get Up, Stand Up!
- In this report, our global fintech team:
- Focuses on three significant jurisdictions in the global digital asset market – the U.S., the EU and the UK.
- Looks at the key legal risks associated with dealing with cryptoassets and decentralised networks.
- Explores the destabilising impact of key market events including insolvencies in 2022, which have in part arisen from well documented issues in the crypto and DeFi markets, and which have created a situation of heightened risk.
- Sets out the matrix of players, products and services in the mainstream and emerging finance markets.
- Considers how risks can play out in terms of increased regulatory scrutiny and enforcement and increased litigation.
- Suggests some practices for achieving and embedding a good legal risk management strategy for players in these markets.
Continue to the full article --> here
Download the 36 page PDF report --> here
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, 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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Solidus Labs Research: 350 New ‘Scam Tokens’ Created Daily in 2022
Cointelegraph | Jesse Coghlan | Dec 18, 2022
More than 350 fraudulent cryptocurrency tokens were created per day this year, defrauding millions of investors, according to blockchain risk monitoring firm Solidus Labs.
- From the start of the year to Dec. 1, 117,629 “scam tokens” were deployed, according to Solidus’ 2022 “Rug Pull Report.”
- That’s a 41% increase from the nearly 83,400 scam tokens that Solidus detected in 2021.
- The report claims that BNB Chain harbors the greatest number of scam tokens, with 12% of all BEP-20 tokens being fraudulent.
- The Ethereum network was second, with a purported 8% of ERC-20 tokens alleged to be scams.
See: Trust Fallacy: 75% of Payment Fraud in Crypto is Carried Out by KYC-verified Accounts
- The most popular type of scam token was a “honeypot," which is a token smart contract that doesn’t allow buyers to resell.
- The most prolific “honeypot” in 2022 was the $3.3 million Squid Game (SQUID) token scam which grew 45,000% in a few days before anonymous founders apparently ran off with investor funds
- Centralized exchanges (CEXs) are also affected by rug pulls, as many behind these malicious tokens use them to fund their fraudulent project and cash out the ill-gotten gains.
Continue to the full article --> here
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, 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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Goldman Sachs Report: Future of Digital Assets and Crypto Winter’s Discontent
Goldman Sachs | Dec 13, 2022
In the wake of FTX's rapid demise, crash of Terra's Luna stablecoin and the failure of Celsius crypto lending platform, questions about regulatory oversight of digital assets, where the ecosystem goes from here, and potential spillover risks to the financial system and the real economy are Top of Mind.
See: Canadian Securities Regulators: Crypto Trading Platform Enforcement Coming
For answers, we turn to former SEC Chairman Jay Clayton, former CFTC Chairman Timothy Massad, One River’s Marcel Kasumovich, Yale’s Gary Gorton, and GS traders, strategists, and economists.
Download the 25 page PDF report --> here
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, 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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