Canadian Regulator Pushes for Investment Funds to Trade Only Exchange-Listed Cryptos

9 months ago 3

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The Canadian financial regulator, the Canadian Securities Administrators (CSA), have outlined that its project towards targeting amendments that reflect priority issues regarding investing in crypto assets.

“We are proposing to amend the definition of “alternative mutual fund” to also include a mutual fund that invests in crypto assets,” was one of the changes brought forth.

Canadian Regulator Tightens Grip on Crypto

According to a recent statement, the CSA is intending to add a new section to its guidelines. This will advise investment funds that they can only invest in crypto tokens that are also easily accessible to the wider general public as well.

We are proposing to add section 3.3.01 which will provide guidance clarifying that the proposed requirement that funds only invest in crypto assets that are either listed for trading, or are the underlying interest in specified derivatives that are listed for trading, on a “recognized exchange” is not intended to restrict funds to only acquire crypto assets through a recognized exchange.”

Typically, within the cryptocurrency community, it is recognized that acquiring a crypto token before its listing on an exchange is advantegous.

However, it often involving more intricate processes such as connecting wallets and exposing oneself to heightened risks. Meanwhile, it holds the potential for profit upon the coin’s exchange debut.

Unrealistic Expectations from Pre-Exchange Crypto Tokens

The potential gain is attributed to the heightened anticipation built up by the token community. There are generally two primary sources of initial anticipation for a crypto token.

First, when the entire community believes in the potential for significant value increase upon exchange listing. Secondly, among the broader exchange audience who enter the token market on the first day of its exchange launch. Likewise, they also perceive it as an early mover advantage.

However, it’s essential to acknowledge that both approaches entail associated risks.

This is a developing story.