Canadian Capital market regulators plan on establishing a new set of rules to address the risks involved with digital currency trading platforms. This measure followed after the unexpected death of Gerald Cotton, CEO and founder of cryptocurrency exchange, Quadriga. Consequently, crypto assets worth one hundred and forty-five million dollars ($145,000,000) are now missing or frozen.
On March 14th, a joint consultation paper was published in which the Canadian Investment Industry Regulatory Organization and Securities Administration discussed the need for legislation that addressed novels features and risks surrounding cryptocurrency exchanges.
Cotton passed away on the 9th of December, 2018, in India before having the chance to reveal keys to one hundred and ninety million Candian dollars (CAD 190,000,000) worth of cold wallets. Upon a request by Quadriga, the firm was awarded creditor protection from 115,000 of their users. This incident has revealed a gap in regulations and legislation surrounding the cryptocurrency industry in Canada, bringing up questions regarding accountability in case of a loss.
Despite the fact that many legal experts are unsure regarding the jurisdiction of securities regulators over these assets, calls for regulation by industrialists and stakeholders have increased by many folds during the last few months. These incidents come at a time when digital asset technology has successfully captured the attention of the government, investors, and regulators all over the globe.
The value of digital assets has amounted to eight hundred billion dollars ($8bn) as of early 2018, and despite a decline in their value owing to market instability, the interest in this technology only continues to grow.