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Undertakings Now Expected for Crypto Asset Trading Platforms Operating in Canada While Seeking Registration

August 19, 2022

The Canadian Securities Administrators (CSA) umbrella group has announced that crypto asset trading platforms (CTPs) that operate in Canada but are not yet registered to do so must sign a preregistration undertaking that addresses investor protection concerns. The CSA warned that its members may take enforcement action if a CTP does not file or abide by the terms of an undertaking.

The CSA’s approach helps level the playing field between CTPs that are operating under the conditions of exemption orders issued by the Canadian securities regulators and those CTPs that are seeking to come into compliance but have not yet done so. The approach also provides more clarity regarding the policy of Canadian securities regulators towards unregistered CTPs that already operate in Canada and that are seeking appropriate registrations and exemptive relief.

Concurrently, the CSA published the pre-registration undertakings (Undertakings) signed by the entities operating as and Coinsquare. Both entities are seeking dealer registrations and exemptive relief from Canadian securities laws to allow them to continue operations in Canada, pursuant to the “interim approach” to regulation of CTPs outlined in the CSA’s Staff Notice 21-329 – Guidance for Crypto-Asset Trading Platforms: Compliance with Regulatory Requirements (CTP Notice) issued jointly with the Investment Industry Regulatory Organization of Canada (IIROC). Please see our April 2021 Blakes Bulletin: Canadian Securities Regulators Deliver Bear Hug to Crypto Asset Trading Platforms Operating in Canada for more information on the CTP Notice.

Please also see our June 2021 Blakes Bulletin: OSC Flashes Further Warnings to Non-Compliant Crypto Asset Trading Platforms and Initiates First Enforcement Actions regarding the Ontario Securities Commission’s (OSC) ongoing enforcement activities in respect of unregistered CTPs that have Ontario clients and have not reached out to the OSC to bring their operations into compliance. 

The CSA’s announcement follows earlier guidance by the CSA and IIROC on advertising, marketing and social media activities of CTPs that are subject to dealer registration provisions of securities legislation found in Joint CSA/IIROC Staff Notice 21-330 – Guidance for Crypto-Trading Platforms: Requirements relating to Advertising, Marketing and Social Media Use (Marketing Notice). The Marketing Notice was aimed at both registered and unregistered CTPs operating dealer platforms in Canada. Please see our September 2021 Blakes Bulletin: New Guidance on Marketing for Crypto Asset Trading Platforms Operating in Canada for more information on the Marketing Notice.


The respective applicants have agreed to abide by extensive terms and conditions set out in the Undertakings. The terms and conditions are based on the obligations that will apply to the applicants once registered, including undertakings to:

  • Diligently pursue applications for registration and exemptive relief from securities laws

  • Cease conducting registrable activity in Canada if the application is not successful within a specified time period

  • Inform the principal regulator of certain events, including material breaches and failures of the CTP’s (or its custodian’s) controls, loss of client assets, material enforcement actions by other regulators, and bankruptcy and related proceedings

  • Act fairly, honestly and in good faith with clients

  • Maintain policies for managing conflicts of interest

  • Restrict its activities, including permitting trading only in assets that the applicant has reasonably determined are not in and of themselves securities or derivatives, and not offer crypto derivatives

  • Not offer crypto lending products or services or staking services to clients without the prior written consent of the appropriate regulators

  • Generally, not offer margin, credit or other forms of leverage to clients other than clients that qualify as institutional or otherwise sophisticated “permitted clients” under securities legislation

  • Not provide advice or recommendations on trading

  • Comply with the Marketing Notice and applicable laws regarding marketing activities

  • Provide regular reports to the applicable regulator regarding platform-level and account-level activity and changes to the CTPs policies and procedures

  • In the case of applicants also operating marketplace platforms (as is the case with Coinsquare and, abide by terms and conditions relating to marketplace regulation, including with respect to fair access, market integrity, conflicts of interest, transparency and internal controls

Other terms and conditions described in the Undertakings cover matters such as account opening, account appropriateness assessments, investment limits, risk statements, custody, insurance and client confidentiality.

For further information, please contact:

Chris Barker                +1-416-863-2710
Christopher Jones      +1-416-863-2704
Alex Moore                  +1-416-863-2754

or any other member of our Capital Markets group.