In a debate that has been ongoing for years now, the Canadian Supreme Court has issued a ruling on the development of a national securities regulator. This ruling has the potential to affect the development of the crypto industry. Whether this will be in a positive or negative manner is not clear.
It was found that the development of such a regulatory body would fall within the constitution. Furthermore, they have ruled that also falling within the constitution is the potential for national regulation of various levels of investments within trade and commerce.
Although this ruling will allow for an oversight body to be created, it does not mean this will happen. To do so the nation’s provinces and territories would still need to each ‘play-ball’. It is believed that various provinces will want to retain some semblance of autonomy, as their individual needs may not necessarily align with that of the nation as a whole. One such province is Quebec, with the Finance Minister, Eric Girard, stating, “We acknowledge the Supreme Court of Canada ruling, but intend to retain our autonomy and keep our expertise in Quebec.”
Despite the hesitancy on the part of Quebec, the following provinces and territories have each indicated that they will take part in the formation of a ‘Canadian SEC’.
- Prince Edward Island
- New Brunswick
- British Columbia
Fragmented Oversight Throughout Canada
10 Provinces, and 3 Territories. Each have their own regulatory body, enforcing varying rules based upon their respective geographical region. This fragmentation has long been a point of argument for those that want a Federal regulator. They believe that Federal oversight will result in a reduction of redundancies, while increasing investor protection.
What remains unclear is the level of fragmentation within the political parties. The issue at hand is one that was inherited by the current Liberal government. To date, the current government has not indicated their stance either way.
An Example to the South
Those in the United States have witnessed first-hand over past years the power that the SEC (Securities Exchange Commission) wields. While they have been slow to release updated guidelines with regards to the world of cryptocurrency, they have had no hesitation in enforcing existing guidelines.
After months of warning the industry of the coming reckoning, the SEC has delivered on their promise. In a flurry of activity in recent days, we have seen the SEC charge DEX founders, and shutdown various ICOs.
How will a potential Canadian national securities regulator view the cryptocurrency industry? Will they take cues from their counterparts to the south?
For now, any token issuers within Canada should take heed and ensure compliance with not only current guidelines, but plan for a more restrictive future.
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