tl;dr
Coinbase has made history as the first international cryptocurrency exchange to be registered in Canada, achieving regulatory progress that has eluded the company in the United States. By becoming a "Restricted Dealer" under the Canadian Securities Administrators (CSA), Coinbase now meets the countr...
Coinbase has made history as the first international cryptocurrency exchange to be registered in Canada, achieving regulatory progress that has eluded the company in the United States. By becoming a "Restricted Dealer" under the Canadian Securities Administrators (CSA), Coinbase now meets the country's stringent legal requirements for crypto trading and investment access. The company views Canada as a market worth pursuing, given its high crypto awareness and technologically savvy population. The term "Restricted Dealer" in Canada reflects the tailored requirements and restrictions from securities regulators for dealers that don't fit neatly under existing categories. This move highlights the challenges and growing pains of the crypto industry in navigating regulatory frameworks and fitting within existing financial laws.
While Coinbase continues its battle with securities regulators in the United States, its success in Canada reflects a collaborative approach with regulators and a dedication to facilitating innovation and consumer protection in the digital asset realm. Coinbase announced on Wednesday that it’s become the “first international cryptocurrency exchange registered in Canada,” achieving regulatory progress that it can’t manage to find at home in the United States. Per a company blog post, the exchange is now a “Restricted Dealer” under the Canadian Securities Administrators (CSA) after filing its pre-registration undertaking roughly one year ago. The registration means Coinbase meets Canada’s strict legal requirements when it comes to crypto trading and investment access, the company told CNBC. Many of those requirements—ranging from a high bar for compliant stablecoins to bans on crypto leverage—have forced firms like Kraken and Ledn to restrict their offerings in the region, and others like Binance to exit the country entirely.
Coinbase, however, says Canada is a market that’s worth the effort.
Millions of Canadians own digital assets.
86% of them believe the financial system needs an update.
Registration is the latest step in doing just that.
Regulation is critical. 29% of non-crypto owners said they'd buy if there were more industry regulation.
“We have a population here that’s highly educated, that’s technology-savvy, that understands the digital economy,” Lucas Matheson, Coinbase's Canadian Country Director, told CNBC. The firm said Canada ranked as Coinbase’s third-most crypto-aware nation globally. “We have a strong brand here in Canada as a publicly traded company, as a company who is committed to compliance, and registration more broadly in the world,” he added. Matheson did not immediately respond to Decrypt’s request for comment.
According to the Canadian Investment Regulatory Organization (CIRO), a “Restricted Dealer” is an umbrella term for dealers that don’t neatly fit under any category, such as an Investment Dealer, Mutual Fund, or Portfolio Manager. Instead, Restricted Dealers receive requirements and restrictions from securities regulators tailored to their particular firm. The ambiguity reflects the crypto industry’s growing pains in politics, as regulators and policymakers debate how to fit the asset class within existing financial laws—and develop new ones to better accommodate it.
Coinbase has frequently credited Canada’s regulators for cooperating with them on a legal framework that encourages innovation and consumer protection alike. “We’ve collaborated with Canadian banks, investment advisors, and pension funds to demonstrate our dedication to facilitating their successful navigation of the evolving digital asset realm,” the company wrote. Coinbase has also secured registrations in France, Spain, Singapore, Italy, Ireland, and the Netherlands over the past year. In the United States, Coinbase continues its battle with securities regulators over whether most cryptocurrencies should be classified as securities or commodities. Last week, the judge denied Coinbase’s motion to dismiss the case on most counts, showing agreement with securities regulators about crypto falling “comfortably within the framework that courts have used to identify securities.”
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