Following the downfall of FTX, different countries are looking to tighten their policies, specifically for digital currencies, in an attempt to safeguard investor funds.

It appears that Canada is taking this path, as it recently took steps towards restructuring its regulations by placing a ban on Margin and Leverage trading for digital currencies.

Companies affiliated with cryptocurrency trading were informed about the recent development in an update made by the official organization of Canada’s provincial and territorial securities regulators, also known as the Canadian securities Administration (CSA).

In the update, it is made known that a revaluation of existing requirements has taken place, leading to the conclusion that said requirements need to be “expanded across all cryptocurrency platforms within the country”.

Excerpts from the update, as seen on the official securities regulator site, reads as follows; 

“Custodians will generally be considered qualified if they are regulated by a financial regulator in Canada, the U.S., or a similar jurisdiction with a supervisory regime for conduct and financial regulation.”

The implementation process will be carried out by both the CSA and other crypto trading platforms.

“CSA members will contact registered crypto trading platforms individually to discuss the application of the expanded terms and conditions to those firms. The CSA will publish further details about this updated approach in the future.”

The move’s effects on cryptocurrency trading platforms in Canada might include a decline in Cryptocurrency trading activities over time. Cryptocurrency trading platforms operating in the country might need to halt the banned options in order to maintain the law. Larger investors are significantly at risk, as margin trading requires using borrowed capital in larger sums from a brokerage.

Exchanges offering cryptocurrency trading might also record a loss in revenue, as it shuts its doors to two of the most commonly used cryptocurrency trading methods. Canadian investors are also likely to record losses, as it is uncertain whether or not they would look elsewhere to continue their trading activities.

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