The Canadian Securities Administrators (CSA) announced an extension to the compliance deadline for crypto asset trading platforms (CTPs) dealing with value-referenced crypto assets (VRCAs).
Originally set for April 30, the new deadline is now October 31. This extension aims to address technical challenges faced by CTPs in meeting the initial deadline and to continue dialogue on the future regulatory framework for these assets.
VRCAs are designed to maintain a stable value by referencing fiat currencies or other values. This category includes fiat-backed crypto assets (FBCAs), which are pegged to the value of a single fiat currency backed by reserves held by the issuer.
The extension follows the CSA's Staff Notice 21-333, issued on October 5, 2023. This notice outlined interim terms and conditions under which registered CTPs, or those who have provided a pre-registration undertaking, could allow clients to buy or deposit VRCAs. The initial intent was for CTPs to discontinue transactions involving FBCAs that did not meet these terms by the end of April.
Regarding concerns raised by CTPs about their ability to adhere to the interim framework by the original deadline, the CSA has opted to provide additional time. This move allows for further engagement and resolution of technical issues, ensuring a smoother transition to the new requirements.
The CSA is also inviting further submissions from CTPs and VRCA issuers regarding the long-term regulation of these assets. Stakeholders are encouraged to engage with their principal regulators to discuss any concerns or suggestions they may have about the evolving regulatory landscape.
Despite some VRCAs meeting the interim conditions set by the CSA, the regulatory body cautions investors about the inherent risks associated with all crypto assets. It emphasizes that compliance with the interim terms does not imply CSA approval, endorsement, or a guarantee of safety. The CSA also clarified that these assets are not equivalent to traditional fiat currencies.