The Virtual Currency Regulation Review: Canada

Securities and investment laws

Canada currently has no comprehensive framework governing the regulation of digital assets. Securities regulation has emerged as the main regulatory instrument in Canada and is primarily a matter of provincial jurisdiction. While each province and territory has its own rules and securities regulators, the securities regulatory framework is largely streamlined and harmonised across Canada, with certain provincial or regional variances. However, legislative jurisdiction in the area of derivatives is divided between the federal and provincial governments, and the harmonisation of rule-making in this area has been more challenging.2

Generally, the basic purposes of the securities laws are to provide protection from unfair, improper or fraudulent practices, foster fair and efficient capital markets, and confidence in those capital markets, and contribute to the stability of the financial system and the reduction of systemic risk.3 Securities regulation in Canada generally governs the distribution and trading of both securities and derivatives. These activities are primarily regulated through the imposition of prospectus requirements, dealer, adviser and investment fund manager registration requirements, and certain requirements imposed upon those operating exchanges, alternative trading facilities or other marketplaces that facilitate their trading, as well as related reporting and disclosure requirements.

The Canadian Securities Administrators (CSA) is an umbrella organisation of Canada's provincial and territorial securities regulators whose objective is to improve, coordinate and harmonise regulation of the Canadian capital markets. While there are no specific rules or regulations for digital assets, the CSA has published guidance in the form of a number of staff notices (the Staff Notices) with respect to virtual currencies with a view to addressing the rapidly evolving developments related to virtual currencies. The CSA and the investment industry self-regulatory organisation known as the Investment Industry Regulatory Organization of Canada (IIROC) have most recently set out the current framework and proposed approach to regulating this asset class in Staff Notice 21-329 – Guidance for Crypto-Asset Trading Platforms: Compliance with Regulatory Requirements.4 Staff Notice 21-329 provides an actionable roadmap, building on earlier guidance, including the 2019 Consultation Paper 21-402 – Proposed Framework for Crypto-Asset Trading Platforms (the Consultation Paper),5 Staff Notice 46-307 – Cryptocurrency Offerings,6 Staff Notice 46-308 – Securities Law Implications for Offerings of Tokens,7 Staff Notice 21-327 – Guidance on the Application of Securities Legislation to Entities Facilitating the Trading of Crypto Assets,8 and Staff Notice 51-363 – Observations on Disclosure by Crypto Assets Reporting Issuers.9

i Applicability of Canadian securities laws to virtual currencies

Virtual currencies may be subject to Canadian provincial securities laws to the extent that a virtual currency is considered a security or a derivative for the purposes of those laws, such as the Securities Act (Ontario) (the Securities Act). The Securities Act defines a security to include, among other things, an investment contract. The seminal case in Canada for determining whether an investment contract exists is Pacific Coast Coin Exchange v. Ontario (Securities Commission),10 where the Supreme Court of Canada identified the four central attributes of an investment contract, namely:

  1. an investment of money;
  2. in a common enterprise;
  3. with the expectation of profit; and
  4. this profit is to be derived in significant measure from the efforts of others.

If an instrument satisfies the Pacific Coin test, it will be considered to be an investment contract and, therefore, a security under Canadian securities laws.

The application of the Pacific Coin test to virtual currencies is not always straightforward, however. Industry participants have taken the position that utility tokens, which have a specific function or utility beyond the mere expectation of profit (such as providing their holders with the ability to acquire products or services) should not be considered securities.11 This position appears to have been accepted by the CSA and IIROC in the Consultation Paper, in which it was acknowledged that proper utility tokens may not be securities. However, the CSA has also noted that most of the offerings of virtual currencies purporting to be utility tokens that its staff had reviewed involved the distribution of a security, usually in the form of an investment contract.12

The CSA and IIROC have also acknowledged that it is widely accepted that some of the well-established virtual currencies that function as a form of payment or a means of exchange on a decentralised network, such as Bitcoin, are not currently in and of themselves, securities or derivatives and have features that are analogous to commodities such as currencies and precious metals.13 In assessing whether a particular virtual currency will be considered a security subject to Canadian securities laws, the CSA will consider the substance of the virtual currency over its form.14 The CSA has outlined a number of considerations in determining whether an investment contract exists. While no single factor is determinative, the CSA has stated that the existence of some or all of the following circumstances may cause a virtual currency to be considered an investment contract:15

  1. the underlying blockchain technology or platform has not been fully developed;
  2. the token is immediately delivered to each purchaser;
  3. the stated purpose of the offering is to raise capital, which will be used to perform key actions that will support the value of the token or the issuer's business;
  4. the issuer is offering benefits to persons who promote the offering;
  5. the issuer's management retains a significant number of unsold tokens;
  6. the token is sold in a quantity far greater than any purchaser is likely to be able to use;
  7. the issuer suggests that the tokens will be used as a currency or have utility beyond its own platform, but neither of these things is the case at the time the statement is made;
  8. management represents or makes other statements suggesting that the tokens will increase in value;
  9. the token does not have a fixed value on the platform;
  10. the number of tokens issuable is finite or there is a reasonable expectation that access to new tokens will be limited in the future;
  11. the token is fungible;
  12. the tokens are distributed for a monetary price; and
  13. the token may be reasonably expected to trade on a trading platform or otherwise be tradable in the secondary market.

A particular virtual currency that meets the criteria of the Pacific Coin test or has certain characteristics described in the CSA guidance discussed in this chapter may be properly considered an investment contract and therefore a security, subject to Canadian securities laws. Regulation will also apply if the investment or contract is a 'crypto contract' as defined in Staff Notice 21-327 and as discussed below.16

ii Virtual currency offerings in Canada

Canadian securities laws generally require the filing of a prospectus to qualify any 'distribution' of securities. No person or company may trade in a security where the trade constitutes a distribution unless a prospectus has been filed or the trade is made in reliance upon a prospectus exemption. Securities originally distributed under a prospectus exemption are generally subject to resale restrictions that require the issuer to have been a reporting issuer (i.e., a public company) for a specified period and, in some cases, that the securities be held for a specified period. To the extent that a virtual currency is considered a security or a derivative, the issuance or distribution to the public is subject to prospectus, qualification or similar requirements, or must be effected pursuant to applicable exemptions from prospectus or derivatives qualification requirements.

There are a number of options available for distributing securities in Canada on a prospectus-exempt basis, generally referred to as exempt distributions or private placements. Most of these are harmonised under National Instrument 45-106 – Prospectus Exemptions.17 The CSA has indicated that persons wishing to distribute virtual currencies may do so pursuant to these exemptions.18 Specifically, distributions may be completed pursuant to the accredited investor exemption, which provides a prospectus exemption for trades of securities to entities and individuals that are qualified accredited investors, subject to compliance with conventional private placement requirements.19

A number of industry participants have successfully completed virtual currency offerings in compliance with applicable securities law requirements and bespoke exemptions from those requirements. In 2017, Montreal-based Impak Finance Inc (Impak) was the first Canadian company to complete a virtual currency offering with the approval of Canadian securities regulators. Impak issued Impak Coin, a virtual currency based on the Waves blockchain platform, for gross proceeds of over C$1 million by way of private placement, in reliance on the offering memorandum exemption.20

A few months later, Token Funder Inc (Token Funder) issued its first virtual currency offering, FNDR, under the oversight of the Ontario Securities Commission (OSC). Token Funder relied upon an offering memorandum exemption and an exemption from the dealer registration requirement granted by the OSC for a period of 12 months from the date of the decision, subject to a number of conditions.21

In May 2019, ZED Network Inc (ZED) became the first company to obtain exemptive relief from the prospectus and dealer registration requirements (discussed below) under Canadian securities laws for the distribution and trading of the ZED digital remittance and foreign exchange blockchain tokens to (1) money transfer operators (MTOs) registered as money services businesses in Canada with the Financial Transactions and Reports Analysis Centre of Canada (FINTRAC) (registered MTOs), and (2) MTOs appropriately registered or authorised to operate as money services businesses, or its equivalent, in accordance with the laws of foreign jurisdictions (foreign registered MTOs), as applicable.22

On 27 March 2020, the OSC granted a time-limited exemption to B2C2 OTC Ltd (B2C2) from the dealer registration and prospectus requirements that would otherwise be applicable to a trade in or distribution of an over-the-counter (OTC) derivative between B2C2 and a 'permitted counterparty' in Ontario, New Brunswick, Newfoundland and Labrador, Prince Edward Island, the Northwest Territories, Yukon and Nunavut.23

In another important decision, the OSC granted TokenGX Inc (TGX), an affiliate of Token Funder Inc., a time-limited exemption to facilitate secondary trading on a platform known as Freedom (FRX). TGX obtained registration as an exempt market dealer until 16 April 2021, subject to certain restrictive terms and conditions, enabling qualified investors in Ontario to purchase and sell certain tokens on the FRX platform.

On 7 August 2020, the OSC granted Wealth Digital Assets Inc (WDA) time-limited relief from certain registrant obligations, relief from the prospectus requirement and derivatives trade data reporting requirements to allow WDA to trade virtual currencies and operate a platform that facilitates the buying, selling and holding of virtual currencies.24 WDA is a wholly owned subsidiary of Wealthsimple Financial Corp (WFC). WFC also owns Wealthsimple Inc, a Canadian registered adviser, and Canadian ShareOwner Investments Inc (ShareOwner), a registered dealer. This decision represented the first authorisation of this kind for a virtual currency trading platform (VCTP) that facilitates trading of virtual currencies through bespoke exemptive relief.

The decision was subject to conditions dealing primarily with trading restrictions, third-party due diligence, platform operations and reporting requirements, including:

  1. trading only of Bitcoin and Ether, through 'crypto rights contracts', using virtual currencies or Canadian dollars;
  2. investment limits of C$30,000 over a 12-month period; and
  3. maintenance of custody by Gemini Trust Company, LLC, a New York trust company regulated by the New York State Department of Financial Services and a 'qualified custodian' under Canadian securities law.

WDA was also required to work 'actively and diligently with IIROC' to ensure a transition from the WDA platform to ShareOwner. Importantly, WDA will not operate as a marketplace or clearing agency.

The OSC issued a subsequent decision pertaining to WDA on 18 June 2021 (the 2021 Decision)25 that replaced the terms set out in the OSC's August 2020 decision.26 The OSC explicitly noted, however, that the conditions of the relief provided in the 2021 Decision were substantially similar to the terms to which WDA was previously subject. The 2021 Decision expands the classes of virtual currency offered by WDA and lifts investment limits for certain types of virtual currency.27 Importantly, as with the earlier relief, the OSC cautioned that the 2021 Decision does not carry precedential weight, reflecting the bespoke nature of the exemptions granted to WDA.28

iii Regulatory Pathway under Staff Notice 21-329

Joint CSA/IIROC Staff Notice – 21-329 Guidance for Crypto-Asset Trading Platforms: Compliance with Regulatory Requirements does not introduce new rules for VCTPs but provides a path to transition into the Canadian regulatory framework for both domestic Canadian VCTPs and global VCTPs that admit Canadian-resident users to trade virtual currencies. The guidance applies to VCTPs that facilitate trading of virtual currencies that are securities (security tokens), and to VCTPs that facilitate trading in virtual currencies that are not securities (such as Bitcoin) but that the CSA views as instruments or contracts that are subject to Canadian securities or derivatives regulation because of their trading processes and structures (crypto contracts).

The framework outlined in Staff Notice 21-329 provides guidance related to the regulation of both 'dealer platforms' and 'marketplace platforms' (each of which is also discussed further below).

The appropriate category of dealer platform registration will depend on the nature of the platform's activities.29 For example, dealer platforms that offer margin or leverage will be required to register as investment dealers and become members of IIROC. Dealer platforms that only facilitate distributions or the trading of security tokens in reliance on prospectus exemptions and do not offer margin or leverage may consider registration as exempt market dealers, or in some circumstances, restricted dealers.30

Dealer platforms that trade crypto contracts and trade or solicit trades for retail investors that are individuals will generally be expected to be registered as investment dealers and become members of IIROC.31 However, they will be able to access a transitional 'interim period' process by seeking restricted dealer registration (provided they do not offer leverage or margin trading) while they ramp up to full investment dealer registration and compliance. The interim period is currently expected to be two years.32

There are also jurisdiction-based factors to consider. Dealer platforms operating in New Brunswick, Nova Scotia, Ontario or Quebec must submit applications for investment dealer registration and IIROC membership during the interim period. However, the securities regulators in Alberta, British Columbia, Manitoba and Saskatchewan will consider other regulatory approaches during the interim period, as warranted. Dealer platforms operating in these jurisdictions are expected to either start the process for investment dealer registration and IIROC membership during the interim period or take other steps during the interim period, in consultation with their principal regulator, to transition to an acceptable long-term regulatory framework.33 The specificities of this type of alternative framework are currently unclear.

Furthermore, dealer platforms that are in the business of trading crypto contracts that are derivatives with Quebec-resident users will be required to register as derivatives dealers under the Quebec Derivatives Act (QDA), again with time-limited relief from the IIROC membership requirement.34 Dealer platforms that also create and market derivatives must be qualified by the Autorité des marchés financiers (AMF) before derivatives are offered to the public.35

Staff Notice 21-329 sets out areas where the CSA may consider flexibility in the application of existing regulatory requirements to dealer platforms seeking registration.36 Dealer platforms are therefore encouraged to reach out to discuss their business models, the appropriate registration category and how requirements may be tailored, including through exemptive relief.37

A platform that is a 'marketplace' (a marketplace platform), discussed below, that does not offer leverage or margin and that is not an exchange may seek registration as an exempt market dealer or restricted dealer, as appropriate, for a limited period.38 Similar to the 'interim period' concept described above (also generally expected to be two years), marketplace platforms operating in New Brunswick, Nova Scotia, Ontario and Quebec are expected to start the registration or exemption process during the interim period.39 Securities regulators in Alberta, British Columbia, Manitoba and Saskatchewan will consider other regulatory approaches and may allow for other steps to be taken during the interim period to transition to an acceptable long-term regulatory framework.40

iv Regulatory considerations for intermediaries

Any person or company engaging in, or holding themselves out as engaging in, the business of trading or advising in securities, and, in certain Canadian jurisdictions, in derivatives, must register as a dealer or as an adviser or, where available, conduct these activities pursuant to an exemption from the dealer or, as the case may be, adviser registration requirement under the applicable securities laws.

A person or entity that directs the business, operations and affairs of an 'investment fund' must comply with the investment fund manager registration requirements or obtain an exemption from the requirements. Registration requirements are generally harmonised under National Instrument 31-103 – Registration Requirements, Exemptions and Ongoing Registrant Obligations (NI 31-103),41 which sets out requirements for dealers and advisers dealing with capital, proficiency, insurance, financial reporting, know your client, investor suitability, client disclosure, safekeeping of assets, record-keeping, account activity reporting, complaint handling and other compliance matters.

In Canada, the requirement to register as a dealer or adviser is triggered where a person or company conducts a trading or advising activity with respect to securities or derivatives for a business purpose.42 The mere holding out, directly or indirectly, as being willing to engage in the business of trading in securities may trigger the requirement to register as a dealer; however, a number of factors must be considered when determining whether registration is required, including whether a business:

  1. engages in activities similar to a registrant;
  2. intermediates trades or acts as a market maker;
  3. carries on an activity with repetition, regularity or continuity;
  4. expects to be remunerated or compensated; and
  5. directly or indirectly solicits.43

In the context of virtual currency distributions, the CSA has noted the following additional factors in determining whether a company may be considered to be trading in securities for a business purpose:44

  1. soliciting of a broad range of investors, including retail investors;
  2. using the internet to reach a large number of potential investors;
  3. attending public events to actively advertise the sale of a virtual currency; and
  4. raising a significant amount of capital from a large number of investors.

Dealer platforms may also be engaged in other activities or functions that may be subject to the dealer registration requirement or be indicative of registrable activity, such as onboarding retail clients, acting as agent for clients for trades in security tokens, or crypto contracts, and offering custody of assets, either directly or through a third-party provider.45

Where dealer registration is triggered, the CSA has stated that persons or companies subject to registration must collect know your client information and perform suitability assessments to ensure that purchases of virtual currencies are suitable, including with respect to investment needs and objectives, financial circumstances and risk tolerance.46

The creation and marketing of products subject to registration are also subject to derivatives-related regulatory requirements, including in relation to qualification, registration and trade data reporting in a number of Canadian jurisdictions, including specifically Quebec, where the rules in relation to OTC and exchange-traded derivatives are more fully developed.47

The CSA has also issued proposals to establish a harmonised framework of registration and business conduct requirements for OTC derivatives market participants.48 The proposals expressly define a commodity to include virtual currencies.

v Exchanges and other platforms

As marketplaces, exchanges are regulated pursuant to their applicable provincial securities statutes, as well as National Instrument 21-101 – Marketplace Operation (NI 21-101),49 National Instrument 23-101 – Trading Rules (NI 23-101)50 and their related companion policies.

NI 21-101 defines a marketplace as a facility that brings together buyers and sellers of securities, brings together the orders for securities of multiple buyers and sellers, and uses established non-discretionary methods under which the orders interact with each other.51

An exchange is a marketplace that may:

  1. list the securities of issuers;
  2. provide a guarantee of a two-sided market for a security on a continuous or reasonably continuous basis;
  3. set requirements governing the conduct of marketplace participants; or
  4. discipline marketplace participants.52

To operate as an exchange in Canada, a person or company must first apply for recognition as an exchange or for an exemption from the recognition requirement.53 As another type of marketplace, alternative trading systems, which provide automated trading systems that match buyer and seller orders, are also regulated under NI 21-101 and NI 23-101. It follows that a VCTP that facilitates the purchase, transfer or exchange of virtual currencies that are considered securities or derivatives may be subject to recognition requirements as securities or derivatives exchanges or marketplaces, as discussed in further detail below.

The applicable requirements will depend on how the VCTP operates and what activities it undertakes. Generally, VCTPs are divided into two categories: dealer platforms and marketplace platforms, although certain VCTPs may be regulated as both.54

Dealer platforms

A VCTP may be considered a dealer platform where:55

  1. it only facilitates the primary distribution of security tokens; and
  2. it is the counterparty to each trade and client orders do not otherwise interact with one another on the VCTP.

Marketplace platforms

A VCTP is considered a marketplace platform if it:56

  1. constitutes, maintains or provides a market or facility for bringing together multiple buyers and sellers or parties to trade in security tokens or crypto contracts;
  2. brings together orders of security tokens or crypto contracts of multiple buyers and sellers or parties of the contracts; and
  3. uses established, non-discretionary methods under which orders for security tokens or crypto contracts interact with each other and the buyers and sellers or parties entering the orders agree to the terms of a trade.

Marketplace platforms will be expected to operate on a basis that is similar to alternative trading systems (ATS) and also be subject to marketplace rules, including NI 21-101, NI 23-101 and National Instrument 23-103 – Electronic Trading and Direct Electronic Access to Marketplaces.57 In addition, trading activity on a marketplace platform may be subject to market integrity requirements.58 However, the CSA anticipates tailoring these requirements to accommodate the novel aspects of VCTPs based on certain core market integrity requirements considered relevant to trading on marketplace platforms.59

Where a marketplace platform performs dealer functions, it would also be subject to the appropriate dealer requirements and, depending on the circumstances and the VCTP's business model, these dealer activities may have to be conducted through a separate entity or business unit, which would need to meet the applicable regulatory requirements or be separated by ethical walls.60

Finally, a marketplace platform that trades security tokens and regulates issuers of those securities, or regulates and disciplines its trading participants other than by merely denying them access to the platform, may be carrying on business as an exchange and would be expected to seek recognition or, if appropriate, an exemption from recognition as an exchange.61

vi Asset management and investment funds

Both retail and institutional demand for economic exposure to virtual currencies has surged in Canada and investment funds have become a popular new vehicle for obtaining this exposure. Persons operating or administering collective investment structures that hold or invest in virtual currencies may also be subject to investment fund manager registration requirements in addition to dealer, adviser and prospectus or private placements requirements. The structures themselves may also be subject to reporting and conduct requirements that apply to investment funds.

Canada has been at the forefront of global activity related to exchange-traded funds (ETFs) dealing in virtual currencies. The rise of virtual currency-based ETFs in Canada was triggered by the OSC's decision to issue a receipt for the final non-offering prospectus of a non-redeemable investment fund (3iQ Fund) filed by 3iQ Corp,62 discussed in greater detail below. In 2021, Purpose Investments received approval from the OSC to launch the world's first direct custody Bitcoin and Ether ETF platforms.63 Similarly to physically backed gold products, these ETFs are backed by physically settled Bitcoin and Ether holdings, which exposes investors to less risk than the alternative method of using self-custody and a digital wallet.64

Staff Notice 51-363 provides greater clarification regarding when investment fund requirements apply to issuers in the business of investing in virtual currency.65 Even in circumstances where an issuer does not meet the technical definition of an 'investment fund', it may still be subject to applicable regulations if investing in virtual currencies is material to the issuer's business and the issuer does not have other substantial operations.66 Securities regulators decide on a case-by-case basis whether to issue receipts for prospectuses to help ensure that proper procedures required for investment funds are followed. In prior cases, the OSC has mandated certain investment concentration restrictions and requirements to use a custodian as described in Part 6 of National Instrument 81-102 – Investment Funds (NI 81-102).67 The discretion to receipt a prospectus is pursuant to the OSC's public interest powers.

In September 2017, First Block Capital Inc became the first registered investment fund manager (IFM) in Canada for a fund dedicated solely to investments in virtual currencies.68 The British Columbia Securities Commission (BCSC) granted First Block Capital registration as an IFM and exempt market dealer to operate a Bitcoin investment fund, subject to certain bespoke exemptions from the applicable regime.69

In October 2018, 3iQ filed a non-offering preliminary prospectus on behalf of the Bitcoin Fund (3iQ Fund), a non-redeemable investment fund established as a trust under the laws of the province of Ontario, in its capacity as investment fund manager of the Fund.70 In February 2019, the Director, Investment Funds and Structured Products (the Director) of the OSC decided that it would be contrary to the public interest to issue a receipt for the 3iQ Fund's preliminary prospectus.

Following a contentious process before an OSC panel, 3iQ was ultimately issued a receipt by the OSC related to its preliminary prospectus in November 2019. Concerns about market manipulation and valuation were assuaged by 3iQ Fund's investment in Bitcoin instead of an unrestricted basket of virtual currencies; its pursuit of a buy-and-hold strategy; and the restriction to trade Bitcoin only on regulated markets. The panel also found sufficient evidence of trading in Bitcoin, including on regulated exchanges, for it to be considered a liquid asset. The decision also signalled that the underlying regulatory objectives may ultimately be better served by encouraging market participants to enter through the 'front door' of the market and engaging regulatory oversight from the outset, rather than through transactions such as reverse takeovers. Importantly, the 3iQ decision challenges the recent trend of expansive interpretation of the 'public interest' under securities legislation, offering a more restricted interpretation.

Anti-money laundering

The Financial Transactions and Reports Analysis Centre (FINTRAC) is Canada's financial intelligence unit. FINTRAC administers the Proceeds of Crime (Money Laundering) and Terrorist Financing Act (PCMLTFA)71 and its associated regulations, and assists in the detection, prevention and deterrence of money laundering and terrorist financing activities.72 The PCMLTFA applies to a wide range of regulated entities, including money services businesses (MSBs). It requires that reporting entities develop a risk-based compliance programme to identify clients, monitor business relationships, keep records and report certain types of financial transactions.73

Effective 1 June 2020, the PCMLTFA was amended to expressly regulate businesses dealing in virtual currencies.74

To mitigate the money laundering and terrorist activity financing vulnerabilities of virtual currencies, while not excessively obstructing innovation, the final amendments did not target virtual currencies themselves, but the persons or entities engaged in the business of dealing in virtual currencies. These 'dealing in' activities include virtual currency exchange services and value transfer services. Persons and entities that are dealing in virtual currency include financial entities, or domestic or foreign MSBs (FMSBs). As required of all MSBs, persons and entities dealing in virtual currencies must implement a full compliance programme and register with FINTRAC. FMSBs are also subject to the same obligations (e.g., to register with FINTRAC, exercise customer due diligence, report transactions and keep records) for these activities. An FMSB found to be non-compliant with the PCMLTFA and its regulations could face an administrative monetary penalty, and in the case of a failure to pay, revocation of its FMSB registration, making it ineligible to do business in Canada.

The final amendments define the term 'virtual currency' as:75

  1. a digital representation of value that can be used for payment or investment purposes that is not a fiat currency and that can be readily exchanged for funds or for another virtual currency that can be readily exchanged for funds; or
  2. a private key of a cryptographic system that enables a person or entity to have access to a digital representation of value referred to above.

Guidance published in connection with the 9 June 2018 proposed amendments states that dealing in activities would include virtual currency exchange services and virtual currency transfer services.76 A virtual currency exchange transaction is defined to mean an 'exchange, at the request of another person or entity, of virtual currency for funds, funds for virtual currency or one virtual currency for another'.77

FINTRAC has also provided guidance to determine when the provision of services to persons located in Canada may subject an entity to FMSB registration. The guidance focuses primarily on whether the services are 'directed' at persons or entities in Canada and states that an entity will be considered to be 'directing' services if:78

  1. the business's marketing or advertising is directed at persons or entities located in Canada;
  2. the business operates a '.ca' domain name; or
  3. the business is listed in a Canadian business directory.

However, even where none of the foregoing criteria apply, FINTRAC has stated that an entity may still be considered to direct services at persons or entities in Canada based on the following additional criteria:79

  1. describing services as being offered in Canada;
  2. offering products or services in Canadian dollars;
  3. making customer service support available to clients in Canada;
  4. seeking feedback from clients in Canada; and
  5. having another business in Canada promote the services to clients in Canada.

In addition to revising the definition of virtual currency, the amendments extend important record-keeping, reporting and identity verification obligations to MSBs, including FMSBs. Notably, an individual's identity may now be verified using technology capable of assessing an identification document's authenticity. Furthermore, while an entity must still determine if the individual presenting the government-issued photo identification document matches the name and photo of the person, this process may now be completed by digital means such as live video chats.80

Effective 1 June 2021, the PCMLTFA and its associated regulations underwent a second phase of amendments that impose additional requirements on reporting entities (REs) dealing in virtual currencies.81 REs must now submit a Large Virtual Currency Transaction Report (LVCTR) to FINTRAC when they receive an amount of virtual currency equivalent to C$10,000 or more in a single transaction or over multiple transactions in a 24-hour period.82 Furthermore, REs must:

  1. keep records of all reportable transactions;
  2. complete the implementation of an LVCTR system as soon as possible prior to 1 December 2021; and
  3. submit all unreported large virtual currency transactions for the period of 1 June 2021 to 30 November 2021 as soon as possible and no later than 31 March 2022 using FINTRAC Upload or the FINTRAC web reporting system (F2R).83

After 1 December 2021, REs are required to submit LVCTRs within five business days after the date on which the virtual currency amount is received.84

In addition, REs must also submit an electronic funds transfer (EFT) report to FINTRAC when they either initiate or receive an international EFT of C$10,000 or more in a single transaction or over a 24-hour period.85 Also effective as of 1 June 2021 is the 'travel rule', which requires specific information to be included when an EFT or virtual currency transfer is sent or received. This requirement applies to financial entities, domestic and foreign MSBs when initiating EFTs or virtual currency transfers.

Quebec has enacted separate MSB legislation, which is administered by the AMF. The Money-Services Businesses Act86 requires that any person or entity that operates a money-services business for remuneration be registered as an MSB. MSB registration issues in Quebec should be considered in connection with any virtual currency businesses with a Quebec nexus.87

Canadian federal legislation also provides for economic and political sanctions, including additional monitoring and reporting obligations and prohibitions. These rules include offences such as knowingly collecting or providing funds to terrorist organisations or associated individuals, or dealing with sanctioned governments, entities or individuals.

Regulation of miners

The process of virtual currency mining, which utilises specialised, high-speed computers, is energy-intensive. While virtual currency mining is not specifically regulated in Canada at this time, the use of virtual currency mining hardware may be subject to provincial or municipal requirements, or both, relating to the use of energy.

Canada's cold temperatures and low electricity costs have made it particularly attractive for virtual currency miners.88 The surge in demand for electricity in this sector has caused some provincial and municipal governments to re-evaluate how to process requests from virtual currency miners going forward.

On 25 April 2019, Quebec's Régie de l'énergie issued a decision89 approving the creation of a new 'blockchain' consumer category and approved the creation of a reserved block of 300 megawatts (MW) for this category, of which 50MW must be allocated to blockchain projects of 5MW or less. On 5 June 2019, Hydro-Quebec launched a request for proposals with respect to the allocation of the 300MW block reserved for the blockchain consumer category. Projects will be evaluated based on economic and environmental criteria, including the number of direct jobs in Quebec, total payroll of direct jobs in Quebec, capital investment in Quebec and total electricity use.

In January 2021, Quebec's Régie de l'énergie issued a decision requesting that virtual currency customers limit their consumption of energy by 95 per cent for up to 300 hours during the winter months.90 In response to energy usage concerns, Hydro-Quebec published a report in April 2021 with a chapter outlining rates and conditions of service targeted specifically at the cryptocurrency mining industry.91

In November 2020, the Bank of Canada acknowledged that the climate crisis is a source of systemic risk for Canada's economy.92 In 2021, major corporations such as Tesla publicly expressed concerns over the potentially deleterious impact of the virtual currency industry on the environment.93 Increased scrutiny surrounding rising carbon emissions, a potential by-product of the virtual currency mining process, has ignited a movement for greater awareness of environmental, social and corporate governance (ESG) considerations and regulation in this industry.94

In the Capital Markets Modernization Taskforce's 'Final Report' released in January 2021, the need for publicly traded companies in Canada to enhance their disclosure of climate change-related financial risks was identified.95 This report contained a recommendation to implement an international framework derived from the Task Force on Climate-related Financial Disclosures (TCFD) to address climate-related concerns.96 The TCFD is a private-sector task force endorsed by a number governments and financial regulators around the world (including the UK government)97 that issues authoritative guidance related to the reporting of financially material, climate-related information.98 Importantly, the recommendation outlined in this report did not address how these disclosure guidelines would specifically impact entities dealing in virtual currency.

Criminal and civil fraud and enforcement

Given the relatively nascent stage of the market, the policing of virtual currencies and virtual currency offerings in Canada presents unique enforcement challenges for both criminal prosecutors and securities regulatory authorities. While most of the litigation in the virtual currency market to date has occurred outside Canadian borders, a few Canadian cases warrant discussion.

On 6 May 2019, the BCSC began investigating Einstein Capital Partners Ltd, Einstein Exchange Inc, Einstein Law Corporation and Michael Ongun Gokturk (collectively, the Einstein Group) after learning, among other things, that customer funds could be at risk from being accessed and repaid, and applied for a court order to preserve the Einstein Group's assets. Pursuant to an application filed by the BCSC on 1 November 2019, the Supreme Court of British Columbia ordered that an interim receiver be appointed to preserve and protect any assets of Einstein Exchange.99 Grant Thornton Limited was appointed as interim receiver and issued their First Report to the Court that same month.100 After issuing this report, Grant Thornton was subsequently discharged from its duties as interim receiver.101

In December 2018, the sole officer and director of the operator of the QuadrigaCX platform (Quadriga) that facilitated the purchase and sale of virtual currencies, died suddenly. It was alleged that this individual was the only Quadriga employee with knowledge of the encrypted passcodes required to gain access to Quadriga's virtual currency cold wallets and, as a result, following his death, the majority of Quadriga's virtual currency assets could not be located.

On 14 April 2020, the OSC published a report detailing the regulator's account of the collapse of Quadriga, finding that the downfall of the platform resulted mainly from the fraud of Quadriga's co-founder and CEO, which included fraudulent trading, covering shortfalls with clients deposits and misappropriation of funds.102 The report found that client assets were not segregated from the platform's own funds, clients did not have control over those assets, and a mix of hot wallets and other virtual currency trading platforms were used to store those assets, without appropriate disclosure to clients. Other shortfalls cited in the report included inadequate books and records, as well as proprietary trading by the CEO and founder with platform clients using alias accounts. Consistent with the guidance set out in Staff Notice 21-327, the OSC also noted that the fact that the platform retained custody, control and possession of client assets and delivered those assets only following withdrawal requests brought it within the scope of securities regulation, with these client entitlements constituting securities or derivatives. The OSC noted that Quadriga covered shortfalls in assets with other clients' deposits and concluded that Quadriga had operated like a Ponzi scheme and that '[w]hat happened at Quadriga was an old-fashioned fraud wrapped in modern technology'. Significantly, the OSC was careful to note that '[p]roperly conducted, virtual currency trading is a legitimate and important component of [the Canadian] capital markets', and it remains committed to working with this industry and to foster innovation. The OSC's report on Quadriga is an important reference document for the identification of key risk factors that the CSA will evaluate in its review of VCTPs seeking regulatory approval in Canada.

In July 2020, Coinsquare Ltd and its executives were ordered to pay over C$2.2 million in sanctions after admitting to engaging in market manipulation by reporting inflated trading volumes, misleading clients about the suspect volume and retaliating against a whistleblower.103 This represented the OSC's first enforcement case against a VCTP.104

On 29 March 2021, the OSC issued a press release concurrent with Staff Notice 21-329 directing VCTPs with Ontario users to contact staff of the OSC by 19 April 2021 to discuss how to bring their operations as a dealer or marketplace into compliance with Canadian securities laws.105 If a VCTP with Ontario users did not do so by that deadline, the OSC warned that steps would be taken to enforce applicable securities law requirements.106

Subsequent to the issuance of Staff Notice 21-329, the OSC commenced enforcement actions against the following VCTPs: Polo Digital Assets, Ltd (Poloniex)107 Mek Global Limited and PhoenixFin Pte. Ltd (collectively KuCoin)108 and Bybit Fintech Limited (Bybit).109

According to the statements of allegations in these cases, these VCTPs failed to commence the process for complying with registration rules and disclosure requirements for distributions by the 19 April 2021 deadline noted in Staff Notice 21-329. The OSC's view is that this conduct was contrary to Subsection 25(1)110 and Section 53111 of the Securities Act. Pursuant to powers afforded by its public interest jurisdiction under Subsection 127(1),112 the OSC is seeking the following enforcement actions:

  1. a cease trade order;
  2. prohibition on acquisition of securities;
  3. inability to apply for exemptions;
  4. prohibition from acting as a registrant, investment fund manager or promoter;
  5. an administrative penalty of up to C$1 million for each failure to comply; and
  6. disgorgement of amounts obtained through violation of the Securities Act.


i Taxation of virtual currencies

For Canadian tax purposes, the Canada Revenue Agency (CRA) has taken the position that virtual currencies constitute a commodity rather than a currency.113 As such, gains or losses resulting from the trade of virtual currencies are taxable either as income or capital for the taxpayer.114 Whether a transaction is on the account of income or capital is a question of fact and is determined by the CRA through an examination of the nature of the transaction in question.

Where a transaction is considered on capital account, the taxpayer will be required to include in computing its income for the taxation year of disposition one-half of the amount of any capital gain (a taxable capital gain) realised in that year. Subject to and in accordance with the provisions of the Income Tax Act,115 the taxpayer will generally be required to deduct one-half of the amount of any capital loss (an allowable capital loss) realised in the taxation year of disposition against taxable capital gains realised in the same taxation year. Allowable capital losses in excess of taxable capital gains for the taxation year of disposition generally may be carried back and deducted in any of the three preceding taxation years or carried forward and deducted in any subsequent taxation year against net taxable capital gains realised in those taxation years, to the extent and under the circumstances specified in the Tax Act. Where a transaction is considered on income account, the resulting gains are taxed as ordinary income and the losses are generally deductible.

ii Virtual currency mining

The tax treatment of virtual currency mining will depend on whether the activity is undertaken for profit or as a personal endeavour.116 A personal endeavour is an activity undertaken for pleasure and does not constitute a source of income for tax purposes, unless it is conducted in a sufficiently commercial and business-like way. However, the mining of virtual currencies is likely to be considered a business activity by the CRA considering the complexity of the activity. The mining of virtual currencies would therefore require the taxpayer to compute and report business income in compliance with the Income Tax Act, including the rules with respect to inventory.

More precisely, the CRA has stated that Bitcoin received by a miner to validate transactions is consideration for services rendered by the miner.117 Where a taxpayer is in the business of Bitcoin mining, the Bitcoin received must be included in the taxpayer's income at the time it is earned. The CRA confirmed that the miner must bring into income the value of the services rendered or the value of the Bitcoin received, whichever is more readily valued, and in most cases, the CRA expects the value of the Bitcoin received to be more readily valued and, accordingly, this is the amount to be brought into income.118

iii Paying with virtual currencies

Where a virtual currency is used as payment for salaries or wages, the amount must generally be included in the employee's income computed in Canadian dollars.119 As a result of the qualification of virtual currencies as a commodity, the use of virtual currencies to purchase goods or services is subject to the rules applicable to barter transactions. Therefore, where virtual currencies are used to purchase goods or services, the value in Canadian dollars of the goods or services purchased must be included in the seller's income for tax purposes, rather than the value of the virtual currencies.120 However, the CRA has stated that the fair market value of the virtual currency at the time the supply is made must be used to determine the goods and services tax and harmonised sales tax payable on the purchase of a taxable supply of a good or service.121

iv Specified foreign property

The CRA has finally stated that virtual currencies situated, deposited or held outside Canada fall within the definition of specified foreign property, as defined in the Tax Act.122 As such, Canadian residents must report to the CRA when the total costs of virtual currencies situated, deposited or held outside Canada exceed C$100,000 at any time in the year by filing Form T1135 with their income tax return for the year.

v Collection of goods and services tax and harmonised sales tax with respect to virtual currency transactions

There is currently no legislation indicating how to address the collection of goods and services tax and harmonised sales tax (GST/HST) in virtual currency transactions. The CRA's position on the characterisation of virtual currencies for GST/HST purposes is equally unclear. On 17 May 2019, the Department of Finance sought to clarify this issue by releasing draft legislation123 amending the Excise Tax Act (ETA)124 to explicitly reference virtual currencies. The proposed amendment adds 'virtual payment instruments' to the definition of 'financial instruments' in Section 123(1) of the ETA, thus rendering any sale of the virtual currency or transaction involving virtual currencies as a form of payment exempt from GST/HST collection. The 2021 federal budget confirmed the government's intention to proceed with the legislative proposals released on 17 May 2019.125 In particular, Bill C-30 made the aforementioned change to the definition of 'financial instruments'126 when it received royal assent and was enacted into law on 29 June 2021.127 The change to the definition of 'financial instruments' is effective as of 18 May 2019.

Looking ahead

As in other jurisdictions globally, there has been a dramatic acceleration in the demand for virtual assets, online transactional activity and the decline in the use of cash. In October 2020, the Bank of Canada published a report on the foundational principles and core features of central bank digital currencies in conjunction with seven other central banks including the Bank of England and the European Central Bank.128 The competitive race between central bank digital currencies and privately issued digital currencies globally will likely accelerate the modernisation and regulation of retail payment systems in Canada. The emergence of novel custodial platforms dealing in virtual currency and a collectibles industry premised upon non-fungible tokens represent other important developments in the virtual currency space. In July 2021, Tetra Trust Company (Tetra) became the first regulated custodian based in Canada that is qualified to store digital assets.129 Tetra underwent an approval process with the Alberta government's Ministry of Finance department for a duration of 18 months to become qualified to act as a custodian for the purposes of NI 81-102130 and NI 31-103.131 At the same time, emerging concerns regarding the negative externalities and environmental impact of excessive energy consumption associated with mining virtual currency may encourage further regulation in this area. Failure to adequately address ESG considerations could impact the continued adoption of digital assets in Canada.

The roadmap established under Staff Notice 21-329 should lead to the development and regulation of new platforms and businesses in the Canadian market and a further refinement of the regulatory framework. The enforcement actions brought against non-compliant VCTPs following this Staff Notice appear to signal a new era of cross-border enforcement activity against global VCTPs that admit Canadian users and refuse to engage with the CSA. However, in the global race to develop crypto-friendly regulatory hubs, Canada may be positioning itself as a tough but pragmatic and credible jurisdiction to establish a virtual currency business.


1 Alix d'Anglejan-Chatillon, Ramandeep K Grewal and Éric Lévesque are partners and Christian Vieira is an associate at Stikeman Elliott LLP. The authors wish to thank 2021 summer student Chelsea Angel for her valuable input.

2 While the province of Quebec has a separate Derivatives Act that regulates over-the-counter and exchange-traded derivatives, derivatives regulation in the remaining provinces is governed by the securities and, in certain provinces, commodities futures legislation.

3 Securities Act, R.S.O. 1990, c. S.5, s. 1.1.

4 Canadian Securities Administrators, Staff Notice 21-329 – Guidance for Crypto-Asset Trading Platforms: Compliance with Regulatory Requirements (Canadian Securities Administrators, 2021) (Staff Notice 21-329).

5 Canadian Securities Administrators and Investment Industry Regulatory Organization of Canada, Consultation Paper 21-402 – Proposed Framework for Crypto-Asset Trading Platforms (Canadian Securities Administrators and Investment Industry Regulatory Organization of Canada, 2019) (the Consultation Paper).

6 Canadian Securities Administrators, Staff Notice 46-307 – Cryptocurrency Offerings, 40 OSCB 7231 (Canadian Securities Administrators, 2017).

7 Canadian Securities Administrators, Staff Notice 46-308 – Securities Law Implications for Offerings of Tokens (Canadian Securities Administrators, 2018).

8 Canadian Securities Administrators, Staff Notice 21-327 – Guidance on the Application of Securities Legislation to Entities Facilitating the Trading of Crypto Assets (Canadian Securities Administrators, 2020) (Staff Notice 21-327).

9 Canadian Securities Administrators, Staff Notice 51-363 – Observations on Disclosure by Crypto Assets Reporting Issuers (Canadian Securities Administrators, 2021) (Staff Notice 51-363).

10 Pacific Coast Coin Exchange v. Ontario (Securities Commission), [1978] 2 SCR 112, which is itself based on the better known 'Howey Test' set out by the Supreme Court of the United States in SEC v. W.J. Howey Co., 328 U.S. 293 (1946).

11 ibid., footnote 7.

12 ibid., footnote 5.

13 ibid.

14 ibid., footnote 7.

15 ibid.

16 ibid., footnote 8.

17 Ontario Securities Commission, National Instrument 45-106 – Prospectus Exemptions (2018).

18 ibid., footnote 6.

19 ibid.

20 Ontario Securities Commission, AMF Impak Finance Decision, 16 August 2017.

21 Ontario Securities Commission, OSC Token Funder Decision, 17 October 2017.

22 Ontario Securities Commission, OSC ZED Network Decision, 21 May 2019.

23 Ontario Securities Commission, B2C2 OTC Ltd, Re, 27 March 2020, 43 OSCB 3429.

24 Ontario Securities Commission, In the Matter of Wealthsimple Digital Assets Inc, 7 August 2020.

25 Ontario Securities Commission, In the Matter of Wealthsimple Digital Assets Inc, 18 June 2021.

26 ibid., footnote 24.

27 ibid., footnotes 24 and 25.

28 ibid., footnote 24.

29 ibid., footnote 4.

30 ibid.

31 ibid.

32 ibid.

33 ibid.

34 ibid.

35 ibid.

36 ibid.

37 ibid.

38 ibid.

39 ibid.

40 ibid.

41 Ontario Securities Commission, National Instrument 31-103 – Registration Requirements, Exemptions and Ongoing Registrant Obligations.

42 Ontario Securities Commission, Companion Policy 31-103 CP – Registration Requirements, Exemptions and Ongoing Registrant Obligations.

43 ibid.

44 ibid., footnote 6.

45 ibid., footnote 4.

46 ibid., footnote 6.

47 Autorité des marchés financiers, Notice relating to the public offering of derivatives on cryptocurrencies and other innovative assets (22 May 2018).

48 Canadian Securities Administrators, Notice and Request for Comment – Proposed National Instrument 93-102 Derivatives: Registration and Proposed Companion Policy 93-102 Derivatives: Registration (published 19 April 2018 for comment until 17 September 2018), and Notice and Second Request for Comment – Proposed National Instrument 93-101 Derivatives: Business Conduct and Proposed Companion Policy 93-101CP Derivatives: Business Conduct (published 14 June 2018 for comment until 17 September 2018).

49 Ontario Securities Commission, National Instrument 21-101 – Marketplace Operation (2018).

50 Ontario Securities Commission, National Instrument 23-101 – Trading Rules.

51 ibid., footnote 49.

52 ibid., footnote 47.

53 ibid., footnote 6.

54 ibid., footnote 4.

55 ibid.

56 ibid.

57 Ontario Securities Commission, National Instrument 23-103 – Electronic Trading and Direct Electronic Access to Marketplaces (2012).

58 ibid., footnote 4.

59 ibid.

60 ibid.

61 ibid.

62 Ontario Securities Commission, OSC 3iQ Corp. Decision, 15 February 2019.

63 Julie Sobowale, 'A new era for crypto', the CBA National magazine, 28 May 2021.

64 ibid.

65 ibid., footnote 9.

66 ibid.

67 Ontario Securities Commission, National Instrument 81-102 – Investment Funds.

68 British Columbia Securities Commission, B.C. Securities Commission grants landmark bitcoin investment fund manager registration (6 September 2017).

69 ibid.

70 Ontario Securities Commission, OSC 3iQ Corp. Decision, 15 February 2019.

71 Proceeds of Crime (Money Laundering) and Terrorist Financing Act, S.C. 2000, c.17.

72 Financial Transactions and Report Analysis Centre of Canada, FINTRAC Annual Report Maximizing Results Through Collaboration, 2017.

73 ibid., footnote 72.

74 ibid.

75 ibid.

76 ibid.

77 ibid.

78 Government of Canada, Foreign Money Services Businesses (FMSBs), 1 June 2020.

79 ibid.

80 ibid.

81 Government of Canada, Financial Transactions and Reports Analysis Centre of Canada, 'Notice on the assessment of obligations coming into force on 1 June 2021, last modified on 18 May 2021.

82 ibid.

83 ibid.

84 ibid.

85 ibid.

86 Money-Services Businesses Act, CQLR, c. E-12.000001.

87 ibid.

88 Naomi Powell, 'Crypto-miners flood into Canada, boosting the hopes of small towns looking for a break', Financial Post, 23 June 2020.

89 Régie de l'énergie decision D-2019-052 (29 April 2019).

90 Régie de l'énergie decision D-2021-007 (28 January 2021).

91 Hyrdro-Quebec report 2021 Electricity Rates (effective 1 April 2021).

92 Shawn McCarthy, 'Canadian corporations push back against internationally aligned-climate reporting', Corporate Knights, 19 January 2021.

93 Katie Martin and Billy Nauman, 'It's a dirty currency: Bitcoin's growing energy problem', Financial Post, 26 May 2021.

94 ibid., footnote 92.

95 Ontario Ministry of Finance, Capital Markets Modernization Taskforce Final Report, January 2021.

96 ibid.

97 ibid.

98 ibid.

99 British Columbia Securities Commission, BCSC acts to protect customers of Einstein Exchange crypto-asset trading platform (4 November 2019).

100 British Columbia Securities Commission and Grant Thornton, Einstein Capital Partners Ltd - Interim Receiver's First Report to the Court, 14 November 2019.

101 British Columbia Securities Commission, Court-appointed receiver of Einstein Exchange concludes its duties (21 November 2019).

102 Ontario Securities Commission, QuadrigaCX: A Review by Staff of the Ontario Securities Commission, 14 April 2020.

103 Ontario Securities Commission, In The Matter Of Coinsquare Ltd., Cole Diamond, Virgile Rostand And Felix Mazer, Settlement Agreement, 16 July 2020.

104 ibid.

105 ibid., footnote 4.

106 ibid.

107 Ontario Securities Commission, Statement of Allegations, Polo Digital Assets, Ltd (Poloniex), 25 May 2021.

108 Ontario Securities Commission, Statement of Allegations, Mek Global Limited and PhoenixFin Pte Ltd (collectively KuCoin), 2 June 2021.

109 Ontario Securities Commission, Statement of Allegations, Bybit Fintech Limited (Bybit), 21 June 2021.

110 ibid., footnote 3, s. 25(1).

111 ibid., s. 53.

112 ibid., s. 127(1).

113 Canada Revenue Agency, Document No. 2013-0514701I7, 23 December 2013.

114 Canada Revenue Agency, Fact Sheets & Taxpayer Alerts, What You Should Know About Digital Currency, 17 March 2015.

115 Income Tax Act, RSC 1985, c.1.

116 Canada Revenue Agency, Document No. 2014-0525191E5, 28 March 2014.

117 Canada Revenue Agency, Document No. 2018-0776661I7, 8 August 2019.

118 ibid.

119 Canada Revenue Agency, Compliance, Virtual Currency, last modified 26 June 2019.

120 ibid., footnote 113.

121 ibid.

122 Canada Revenue Agency, Document No. 2014-0561061E5, 16 April 2015.

123 Department of Finance Canada, Draft Legislation Relating to the Excise Tax Act, 17 May 2019.

124 Excise Tax Act, RSC 1985, c. E-15.

125 Department of Finance Canada, Federal Budget 2021, Annex 6 Tax Measures: Supplementary Information, Previously Announced Measures, 19 April 2021.

126 An Act to implement certain provisions of the budget tabled in Parliament on 19 April 2021 and other measures, Bill C-30, Second Session, Forty-third Parliament, Canada, 2020–2021.

127 ibid., footnote 126.

128 Bank of Canada, et al., 'Central bank digital currencies: foundational principles and core features', 9 October 2020.

129 Vanmala Subramaniam, 'Calgary fintech startup Tetra Trust becomes Canada's first regulated custodian of crypto assets', The Globe and Mail, 8 July 2021.

130 ibid., footnote 67.

131 ibid., footnote 41.

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