CSA Publishes Business Plan, Includes Key Crypto-Asset Issues

On June 13, 2019, the Canadian Securities Administrators (“CSA”), a national organization committed to harmonizing securities regulation across Canada,  published the CSA Business Plan 2019-2022 (“Plan”) outlining initiatives to better assist participants in the capital market industry.  Most notably, the Plan identifies as its Strategic Goal #6 “Respond[ing] to technology-related emerging regulatory issues”. This includes the goal of increasing Canadians’ awareness of policy issues pertaining to cryptocurrency in the context of emerging technology.

Emerging technologies often create regulatory challenges because of unknown implications of the technology itself, coupled with the lack of regulatory clarity. Market participants are often affected by shifts in market conditions, investor demographics, technological innovations, and globalization.

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The Cryptopia Exchange Insolvency and the Importance of Data Assets

It will come as no surprise that the insolvency of a cryptocurrency exchange can lead to concerns about the recovery of assets (just think about the recent insolvency of the Canadian exchange, QuadrigaCX). The recent insolvency of Cryptopia Limited (“Cryptopia”), a New Zealand-based cryptocurrency exchange, is a good example of how these concerns can play out.  It demonstrates the importance of taking steps (both in advance of insolvency, and afterwards) to protect the assets of an insolvent exchange – in this case, to preserve data assets consisting of user account information held by a third party in another jurisdiction that the liquidator needed  to determine the owners/potential creditors of millions of cryptocurrency tokens held by the insolvent company.

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