Custodial wallet / SaaS in Canada

FINTRAC — AML/CFT, MSB registration, transaction reporting

CSA — coordinates provincial and territorial securities regulation of crypto trading platforms through CSA Staff Notice 21-327 (16 January 2020) on when securities law applies, Joint CSA/IIROC Staff Notice 21-329 (29 March 2021) on compliance, and the 6 August 2024 expectation that platforms register as investment dealers and become CIRO members.

Proceeds of Crime (Money Laundering) and Terrorist Financing Act (2000) — AML/CFT, MSB registration

CSA Staff Notice 21-327 (16 January 2020) sets out when securities legislation applies to crypto trading platforms; the compliance and registration framework followed in Joint CSA/IIROC Staff Notice 21-329 (29 March 2021), the day the OSC told platforms to start registration or face enforcement action, and the OSC began proceedings against a non-compliant offshore platform on 25 May 2021.

VASP: a crypto platform serving Canadians registers with FINTRAC as a money services business (or foreign MSB) for dealing in virtual currency and, for crypto contracts, with the securities regulators, which since 6 August 2024 expect investment dealer registration and CIRO membership rather than restricted dealer status; Binance, whose principal regulator was the Alberta Securities Commission, announced on 12 May 2023 that it would withdraw from Canada.

CUSTODY: Under the standard pre-registration undertaking in CSA Staff Notice 21-332 (22 February 2023), a crypto trading platform holds client crypto assets in trust for clients, separate from its own assets, with an Acceptable Third-party Custodian (such as a Canadian custodian or Canadian financial institution, or another custodian meeting the notice's criteria or consented to by the regulator), and keeps at least 80% of the value of client crypto assets with third-party custodians.

EXCHANGE: A crypto exchange serving Canadians registers with FINTRAC as a money services business (or foreign MSB) for dealing in virtual currency and, where it trades crypto contracts, with the securities regulators; since 6 August 2024 the CSA expects such platforms to register as investment dealers and join CIRO, and no longer grants time-limited restricted dealer registration or accepts new pre-registration undertakings.

Individuals must register if they trade, advise or underwrite on behalf of a registered dealer or adviser, or act as the ultimate designated person or chief compliance officer of a registered firm; an individual's registration must be sponsored by a registered firm and may be sought in more than one province or territory.

Registration authority rests with each provincial or territorial securities regulator; restricted-dealer applicants apply separately to each regulator, and the OSC registers crypto trading platforms for Ontario through its own decisions, with Cybrid Canada registered for Ontario only as of 25 September 2026.

CSA members coordinate registration through the passport system (Multilateral Instrument 11-102) and, with Ontario, the interface system: a firm registering in several provinces or territories files through the passport and interface system, except restricted dealers, which apply separately to each regulator.

Anyone in the business of trading securities or advising clients on securities must be registered with the securities regulator in each province or territory where they do business, unless an exemption applies

Registration framework is established through National Instrument 31-103 (NI 31-103) — Registration Requirements, Exemptions and Ongoing Registrant Obligations

NI 31-103 s. 12.1 requires a registered firm's excess working capital (Form 31-103F1) not to fall below zero for 2 consecutive days, with minimum capital of $25,000 for an adviser, $50,000 for a dealer and $100,000 for an investment fund manager; dealers must also maintain bonding or insurance (s. 12.3). Investment dealers that are CIRO (formerly IIROC) members are exempt from ss. 12.1 and 12.3 under s. 9.3(1) unless also registered as investment fund managers.

Under NI 31-103 s. 11.3(1) every registered firm must designate an individual registered in the category of chief compliance officer; the Exempt Market Products Exam is a proficiency option only for an exempt market dealer's CCO (s. 3.10), alongside the PDO or Chief Compliance Officers Qualifying Exam and 12 months of relevant experience.

CSA Staff Notice 21-327, Guidance on the Application of Securities Legislation to Entities Facilitating the Trading of Crypto Assets (16 January 2020), states that a platform is generally not subject to securities legislation only if the underlying crypto asset is not a security or derivative and each contract results in, and is settled by, immediate delivery of the crypto asset to the user.

OSC Crypto Businesses guidance (osc.ca/en/industry/registration-and-compliance/crypto-businesses).

Canadian Securities Administrators (CSA): The umbrella organization coordinating provincial and territorial securities regulators, issuing national guidance for crypto asset trading platforms.

Ongoing Focus on Unregistered Platforms: Securities regulators continue to target platforms operating in Canada without registration. This often results in cease trading orders, financial penalties, and requirements for platforms to either register or exit the Canadian market.

Under CSA Staff Notice 21-332 (22 Feb 2023) unregistered crypto asset trading platforms could give a pre-registration undertaking (PRU) to their principal regulator while applying for registration. On 6 Aug 2024 the CSA ended that interim approach for time-limited restricted dealer registration, including new PRUs; new platforms apply directly to the Canadian Investment Regulatory Organization (CIRO). PRUs of ByteX, CatalX and Uphold expired or were withdrawn in 2023.

On 22 Jun 2022 a panel of the Capital Markets Tribunal approved a settlement between the Ontario Securities Commission and Bybit Fintech Limited (British Virgin Islands) for operating an unregistered crypto asset trading platform; Bybit disgorged USD 2,468,910, paid CAD 10,000 toward investigation costs, and gave an undertaking not to open new Ontario accounts or offer new products while registration discussions continue, and to wind up its Ontario operations if they fail.

On 22 Jun 2022 a panel of the Capital Markets Tribunal permanently banned Mek Global Limited (Seychelles) and PhoenixFin Pte. Ltd. (Singapore), together KuCoin, from participating in Ontario's capital markets and ordered an administrative penalty of CAD 2,000,000 plus $96,550.35 in OSC investigation costs for operating an unregistered crypto asset trading platform. Separately, FINTRAC imposed an administrative monetary penalty of $19,552,000 on Peken Global Limited (operating as KuCoin) on 28 Jul 2025 for 3 violations, which Peken has appealed.

On 17 Mar 2022 the Ontario Securities Commission published an undertaking by Binance Holdings Limited and Binance Canada Capital Markets Inc. confirming that activities involving Ontario residents had ceased, after Binance falsely told investors on 29 Dec 2021 that it could keep operating in Ontario. Binance told the Alberta Securities Commission (principal regulator for the CSA) on 2 May 2023 that it would withdraw from Canada and announced the exit publicly on 12 May 2023. FINTRAC imposed an administrative monetary penalty of $6,002,000 on Binance Holdings Limited, as a foreign money services business, on 7 May 2024 for 2 violations; Binance appealed to the Federal Court.

FINTRAC website: www.fintrac-canafe.gc.ca