Kraken Turns Tables on Canadian Regulators in Nine-Page Rebuttal
Bitcoin exchange Kraken has responded to Canadian regulators’ proposed approach to cryptocurrencies. Source: (i) Shutterstock (ii) Shutterstock ; Edited by CCN
In a sternly written paper to the Canadian Securities Administrators and the Investment Industry Regulatory Organization of Canada, the crypto exchange explained its gripes. The two regulatory bodies have proposed a security law framework that all exchanges would have to abide by whether they like it or not.
Kraken strongly recommends against Canada imposing a security law framework on crypto currency exchanges in public response to the Proposed Framework for Crypto-Asset Trading Platforms published by the CSA and the IIROC #bitcoinca https://t.co/z2TgW3vjQu
— Kraken Exchange (@krakenfx) May 16, 2019
In March, the regulator pair released a consultation paper called the “Framework for Crypto-Asset Trading Platforms.” The industry had until May 15 to submit comments about the proposal, CCN reported.
Questions posed by the regulators related to risk mitigation, safeguarding investors’ assets, and market manipulation and deception.
Kraken got to work on its response, delivering on the deadline day in a nine-page document.
One of the proposed items Kraken takes issue with relates to how the regulators would define securities. In their proposal, regulators state:
“However, securities legislation may still apply to Platforms that offer trading of crypto assets that are commodities because the investor’s contractual right to the crypto asset may constitute a security or derivative.”
“This premise is faulty with respect to reputable Exchanges…[Most] reputable exchanges operate as custodians or bailees.