Canadian regulators outline new crypto guidelines

The Canadian Securities Administrators (CSA) at the end of last week announced new guidance set to better the level of disclosures associated with digital assets

The Canadian Securities Administrators have formally laid out new guidelines to improve crypto disclosure. They specifically target issuers that are directly linked with digital assets in the country. The administration body, which features securities regulators from different regions in the country, published the guidance at the end of last week.

Speaking on the matter, the CSA chair Louis Morisse, said “The crypto asset industry is relatively nascent and notably presents unique accounting issues and auditing challenges. This guidance is meant to support crypto asset reporting issuers in providing the information necessary for investors to make informed investment decisions.”

The guidance dwells around disclosure expectations in “safeguarding crypto assets, the use of crypto asset trading platforms, risk factors, material changes, and promotional activities.” It further directs the issuers of crypto assets on how to handle challenging accounting and disclosure issues.

It also explains the need to eliminate erroneous disclosure as it affects the decisions made by investors.

“It is important to avoid inaccurate or misleading disclosure and to provide the information necessary for investors to make informed investment decisions. Crypto issuers considering filing a prospectus or entering into a restructuring transaction to enter the Canadian public markets should carefully consider what disclosure to provide about their business model in order to meet their regulatory requirements.”

The guidelines come at a time when Bitcoin is flourishing and attracting both retail and institutional investors all around the world. The massive Bitcoin purchases involving Tesla, MicroStrategy, and PayPal have significantly contributed to this prosperity.

Canada, particularly, represents one of the best crypto markets in the North and South American region. It was the first country in the region to have the first publicly-traded Bitcoin exchange-traded fund, Purpose Bitcoin Fund, which debuted last month. It was shortly afterward followed by Evolve Funds Group, whose Bitcoin ETF application got approval less than a week later.

Both had a brilliant start, with the former recording $421.8 million in assets under management within its first two days of trading on the Toronto Stock Exchange. Bloomberg analyst Eric Balchunas even predicted that the ETF would hit $1 billion in assets under management in its first two weeks of launch.

Down south, the US Securities and Exchange is yet to approve any of the filed applications seeking to introduce a similar ETF product into the market.