Toronto-based cryptocurrency asset trading platform CoinSmart Financial inc. has been granted status as a marketplace through its operating subsidiary Simply Digital Technologies by all Canadian securities regulators.
The company is the second to receive regulatory approval just prior to the end of the year. Earlier this month, Bitbuy became the first crypto trading platform to be regulated as a marketplace in the country, enabling the startup to offer Canadians a platform for buying and selling crypto assets, with all trades taking place in a regulated space.
With the Ontario Securities Commission (OSC) as the principal regulator of CoinSmart’s application, the startup was granted a two-year relief to facilitate crypto assets while it seeks registration as an investment dealer and membership with the Investment Industry Regulatory Organization of Canada.
Founded in 2018, CoinSmart is an exchange for cryptocurrencies, including Bitcoin, Ethereum, Stellar, and Dogecoin. It claims to be the first Canadian exchange to be regulated by the Financial Transactions and Report Analysis Centre of Canada (FINTRAC).
Just two months ago, the startup received an exemption from regulators to operate as a restricted dealer under securities laws. The approval came from the OSC, as CoinSmart joins a small but growing list of crypto trading platforms that were granted the exemption.
Although the exemption allows the exchange to operate, it prohibits the restricted dealer from allowing an order to be matched between two customers. Instead, it has to match the other side of all customer orders by routing the order to an external liquidity provider (typically with a markup applied). These external liquidity providers may or may not be regulated in Canada.
According to CoinSmart, its marketplace registration status guarantees all trades fully take place within a regulated market. CoinSmart filed its application at the end of March.
In the race to lead the Canadian crypto space, Toronto-based Bitbuy received its approval just three weeks before CoinSmart.
Launched in 2016, Bitbuy claims over 350,000 clients with over $4 billion traded in its cryptocurrency exchange platform. The startup is also a registered money service business in Canada under FINTRAC.
Bitbuy CEO Michael Arbus said the marketplace registration offers heightened transparency and lower transaction costs.
“We believe Canadians deserve full disclosure over the cost of the crypto assets they are trading,” he noted. “Canadians have a choice to invest their capital with a platform that reports the actual execution price of a trade.”
Feature image courtesy Unsplash.