The Canadian Securities Administrators (CSA) issued a warning note to investors on June 6, 2018, which called for caution when trading on cryptocurrency exchanges. Despite online exchanges claiming to be registered or verified, the CSA clarified that none of them were recognized officially in Canada.
CSA Urges Caution
The CSA is the authority on regulating securities in Canada. Its jurisdiction is spread over ten provinces and three territories and is responsible for developing a proper framework for securities trading and investor protection.
The CSA-issued press release appealed the Canadian citizens to express caution when dealing with cryptocurrency trading platforms, as no operator has the requisite permission to formally run trading operations in the country.
The note highlighted that investors must verify the authenticity of online exchanges before dealing with them. Louis Morisset, Chair of CSA said:
“We want investors to understand that just because a platform may advertise itself as an exchange, that does not mean the platform is complying with applicable securities regulations.”
No Guarantee of Cryptocurrency Tokens
Any investor with a cryptocurrency exchange account may not be protected under Canadian securities and investor laws. In the unforeseen scenario that an exchange gets shut down, loses its users’ funds, or is attacked, an investor may lose the entire balance they held with the entity with little recourse available from the CSA or otherwise.
The law stipulates that any such exchange seeking registration to operate as a cryptocurrency exchange to service Canadian investors must ensure “secure handling of client funds, appropriate safekeeping and protection of assets, confidentiality safeguards for personal information, reliable processes for pricing and trading in crypto assets, appropriate investor pre-trade disclosures and measures against market manipulation and other harmful practices.”
CSA Notice of August 2017
The note is similar to CSA-issued letter in August 2017, which warned investors that the prices of cryptocurrency might vary from region to region giving rise to arbitrage opportunities. However, the high arbitrage was deemed harmful by authorities for retail investors.
The CSA has maintained that while a coin or token may be the underlying utility being sold and purchased, it would still treat it on par with a share. Thus, tokens will continue to be treated as securities and be subject to Canadian trading laws.
The post Canada Urges Caution as no Cryptocurrency Exchange Guarantees User Security appeared first on BTCMANAGER.
Source: BTCManager.com
Original Post: Canada Urges Caution as no Cryptocurrency Exchange Guarantees User Security
