Home Technology Coinsquare’s COO shares his thoughts on being Canada’s first regulated crypto dealer exchange

Coinsquare’s COO shares his thoughts on being Canada’s first regulated crypto dealer exchange

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Coinsquare’s COO shares his thoughts on being Canada’s first regulated crypto dealer exchange

It’s a story which still haunts the first generation of Canadian crypto users to this day. Four years prior, Gerald Cotten, co-founder of QuadrigaCX, then Canada’s largest cryptocurrency exchange, died under mysterious circumstances in India. But, before his death, Cotten took virtual keys for digital wallets and moved them to cold storage, resulting in the permanent loss of $190 million in user funds.

The incident sparked a crisis of confidence in the country’s emerging crypto industry and made regulators deeply skeptical of blockchain technology. However, old wounds eventually heal. Fast forward to today, and Coinsquare has taken over to become one of the largest crypto exchanges in Canada, with a cumulative trading volume of $8 billion since 2014.

In an interview with Cointelegraph Business Editor Sam Bourgi, Coinsquare Managing Director Eric Richmond explained that a regulatory framework now exists to prevent similar incidents in the future:

“We have taken a very different approach than in the US Unlike businesses south of the border, all crypto trading platforms here must be registered with the Investment Industry Regulatory Organization of Canada (IIROC) . There is a backlog with applications being processed at the moment, while ours have been submitted since November 2020, as we wanted to be one of the first regulated players in the market.

As the regulation only recently came into effect, all crypto exchanges are granted a two-year exemption where they must register with IIROC during this period. Currently, Coinsquare is the only company in the space registered with IIROC. Likewise, the company has implemented a strict set of rules when it comes to listing new tokens to ensure that its users are not scammed:

“We put it through the evaluation of the underlying technology, the marketing, the team behind it, analyzing potential legal issues, irregular price movements, etc. We review his in-depth analysis across different teams, such as Compliance, Business, Legal, and Security. It’s about truly understanding the token. And if he passes the tests, then the registration threshold is set.”

Canadian regulators have taken a tough stance on exchanges failing to comply with the new rules. In March, Binance ceased operations in the province of Ontario and admitted to the Ontario Securities Commission (OSC) that it was not registered there. Similarly, the OSC taken enforcement action against cryptocurrency exchanges KuCoin and Bybit, alleging a violation of securities laws.