The Office of the Superintendent of Financial Institutions (OSFI), the Financial Consumer Agency of Canada (FCAC) and the Canada Deposit Insurance Corporation (CDIC) issued yesterday a statement to all regulated entities that carry out crypto-related services or engage in crypto-asset activities (the “Statement”) reinforcing their expectations that federally regulated entities comply with all regulatory requirements and with any guidance when engaging in crypto-related services or crypto-asset activities.
OSFI, FCAC, and CDIC, among other federal agencies, have been concertedly monitoring the risks that crypto-related services and crypto-asset activities pose to consumers and the financial system more broadly. These efforts align with the Department of Finance’s continuing work with respect to the digitalization of money.
The Statement sets out OSFI, FCAC and CDIC expectations regarding:
- compliance with existing federal financial laws, as well as regulations or guidance issued by federal and provincial regulatory agencies;
- prudential regulation, including the regulatory capital and liquidity treatment of crypto-asset exposures;
- enhanced consumer protection requirements and measures; and
- disclosure obligations concerning the ineligibility of deposit insurance protection under the CDIC Act for crypto assets.
Regulated entities engaging in crypto-related services or crypto-asset activities should review the Statement carefully to ensure they understand the regulatory landscape and their duties and responsibilities across it. They should also proactively monitor regulatory changes to ensure continued compliance.
For further information concerning regulatory requirements applicable to crypto-related services or crypto-asset activities, please contact any member of our Financial Services Regulatory Group.
The author would like to thank Cathy Costa-Faria, Associate for her assistance in writing this Update.