Last week, the Canadian Securities Administrators (“CSA”) and the Investment Industry Regulatory Organization of Canada (“IIROC”) jointly published their third staff notice this year targeting crypto-trading platforms (“CTPs”) that are registered or have applied for registration as securities dealers. This staff notice 21-330 (the “Notice 21-330”) provides guidance on the types of advertising activities, social media content, and marketing strategies by CTPs that may breach securities requirement.

Continue Reading CSA & IIROC Warn Crypto-Trading Platforms Against Misleading Marketing Activities

On March 29, 2021, the Canadian Securities Administrators (“CSA”) and the Investment Industry Regulatory Organization of Canada (“IIROC”) jointly published Staff Notice 21-329 Guidance for Crypto-Asset Trading Platforms: Compliance with Regulatory Requirements (“Notice 21-329”)[1]. Notice 21-329 provides guidance on how securities legislation will be applied to crypto-asset trading platforms (“CTPs”) and in doing so expands on the regulatory guidance previously set out in CSA Staff Notice 21-327[2] and joint CSA/IIROC Consultation Paper 21-402[3].

On the same day, the Ontario Securities Commission (“OSC”) issued a news release imposing a deadline of April 19, 2021 for CTPs to contact OSC regarding bringing their operations into compliance. The OSC intends to take enforcement actions towards those CTPs who fails to do so by the deadline, including CTPs located outside of Ontario that allow access to Ontarians.
Continue Reading CSA and IIROC publish updated guidance on cryptocurrency regulatory issues; OSC issues deadline for cryptocurrency companies to begin regulatory compliance efforts

On March 11, 2021, the Canadian Securities Administrators (“CSA”) published Staff Notice 51-363 – Observations on Disclosure by Crypto Assets Reporting (“Notice 51-363”), the first update from CSA regarding entities dealing in crypto assets in more than a year[1]. Based on the disclosure of reporting issuers acting in the crypto asset space, Notice 51-363 provides staff guidance on expectations for disclosure in this industry.

Crypto asset reporting issuers have the same obligations as other public companies in disclosing material information and changes that affecting their businesses, as well as the financial impacts of such risks. Notice 51-363 reiterates the importance of fulfilling these obligations, and at the same time, recognizes the emerging nature of the crypto asset industry and novel issues reporting issuers may face.

Notice 51-363 can assist current and future reporting issuers because it provides detailed guidance on disclosure expectations in the context of crypto assets industry and highlights perceived insufficiencies in the disclosure of current reporting issuers.
Continue Reading CSA urging crypto asset reporting issuers to improve disclosure quality

On December 22, 2020, the U.S. Securities and Exchange Commission (“SEC”) filed an action against Ripple Labs Inc. (“Ripple”), Christian Larsen, the company’s co-founder, executive chairman of its board, and former CEO; and Bradley Garlinghouse, the company’s current CEO (together, the “Defendants”) for conducting an unregistered securities offering with a total value of US$1.38 billion.