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IIROC Approves Coinsquare Registration – A First in Canadian Crypto

Oct 13, 2022

Coinsquare IIROC registration approved - IIROC Approves Coinsquare Registration - A First in Canadian Crypto

Investment Industry Regulatory Organization of Canada (IIROC) announced late Wednesday afternoon that Coinsquare is now registered as an investment dealer, the first in the Canadian crypto sector.

  • The new registration will bring a number of changes to the exchange. It will have to fully segregate client assets through a licensed and insured custodian, be subject to more stringent operational controls, keep more capital on hand and regularly report on the state of its balance sheet.

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  • Cash held in client trading accounts will be insured by the Canadian Investment Protection Funds.
  • Coinsquare has also been approved to operate an Automated Trading System, allowing it to facilitate trading in illiquid coins, a practice that's common in traditional equity markets.
  • The platform will not be able to offer trading on margin or short sales, though it plans on working towards being able to offer these services in the future.
  • The company will not offer products such as bitcoin exchange-traded funds, and clients will still only be able to buy a maximum of $30,000 in crypto assets in most provinces.

Matt Burgoyne, a partner at Osler, Hoskin & Harcourt LLP:

IIROC is historically a very conservative organization that licenses investment broker dealers. So, the more traditional financial sector. IIROC welcoming and accepting for registration a cryptocurrency exchange with retail users is a very significant development in the securities world and in the cryptocurrency world.

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Right now, all the regulated Canadian exchanges can't extend margin, credit or other forms of leverage so they're losing a competitive advantage to the large offshore international exchanges. Hopefully the Canadian IIROC-registered exchanges like Coinsquare will soon be able to offer margin and leverage which would even the playing field a bit.

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