It is a story that also haunts the first generation of Canadian crypto users even today. 4 years prior, Gerald Cotten, co-founding father of Canada’s then-largest cryptocurrency exchange QuadrigaCX, died under mysterious conditions in India. But, before his passing, Cotten required virtual keys for digital wallets and moved them into cold storage, resulting in the permanent lack of $190 million in user funds.
The incident triggered an emergency of confidence within the country’s emerging crypto sector making regulators deeply skeptical of blockchain technology. However, old wounds eventually heal. Go forward to today, and Coinsquare has had to become certainly one of Canada’s largest crypto exchanges, with $8 billion in cumulative buying and selling volume since 2014.
Within an interview with Cointelegraph business editor Mike Bourgi, Coinsquare chief operating offic Eric Richmond described that the regulatory framework now exists to avoid similar occurrences later on:
“We’ve taken a significantly different approach compared to U.S. Unlike firms south from the border, all crypto buying and selling platforms here have to be registered using the Investment Industry Regulatory Organization of Canada (IIROC). There’s a backlog with processing applications right now, basically we had ours posted from in November. 2020 once we thought about being among the first controlled players available.”
Because the regulation only arrived to pressure lately, all crypto exchanges receive a 2-year exemption where they have to register using the IIROC during this time period. Presently, Coinsquare may be the only firm within the space that’s IIROCregistered. Similarly, the organization includes a strict algorithm in position with regards to listing new tokens to make sure its users don’t become a victim of scams:
“We place it through evaluating the actual technology, the marketing, they behind it, analyzing potential legalities, irregular cost movements, etc. We undergo his in-depth analysis across different teams, for example compliance, business, legal, and security. It comes down to genuinely comprehending the token. And when it passes the tests, then your listing threshold is placed.”
Canadian regulators took a harsh stance on exchanges allegedly not following the brand new rules. In March, Binance stopped operations within the province of Ontario and accepted towards the Ontario Securities Commission (OSC) it had become unregistered there. Similarly, the OSC required enforcement action against cryptocurrency exchanges KuCoin and Bybit, claiming a breach of securities laws and regulations.
