Last October, I wrote an article discussing why the CSA needs to pivot away from investment limits placed on crypto assets except for those that are designated as “specified crypto assets” (“SCAs”). At that time, the designated SCAs included: bitcoin, ether, litecoin, bitcoin cash and certain stablecoins. Other than the addition of certain stablecoins, this is a list that has remained unchanged since the first crypto asset trading platform (“CTP”) was registered in 2021.
One point I raised in the article was that the SCA designation is inconsistent with the CSA’s criteria of crypto assets for public funds. At minimum, the designated SCAs should be expanded to include crypto assets that have been approved for use in Public Crypto Asset Funds – including Solana and XRP.
So it is exciting to see that in the latest decision for a CTP, published last week, the list of designated SCAs has been expanded to now include Solana! This represents a modest step towards a more coherent regulatory framework for crypto assets businesses operating in Canada.
While great news, I still stand by the reasons I identified earlier as to why the SCA designation should be abandoned. This includes the practical challenges of updating the list of SCAs across all registered CTPs when the SCAs are designated within each individual CTP’s decision (e.g., as opposed to an external list maintained by the CSA).
Looking forward to seeing what other regulatory developments are on the horizon in Canada!