Reducing the risk to consumers who invest in crypto assets

FSRA proposes guidance clarifying registration requirements for trust corporations, including crypto custodians

The Financial Services Regulatory Authority of Ontario (FSRA) is proposing guidance that clarifies when trust corporations, including crypto custodians, need to register with FSRA. This guidance is designed to better protect Ontario consumers and help to address “regulatory gaps” with respect to trust corporations holding people’s crypto assets.

“There has been an increase in consumer interest and investment in crypto assets globally,” said Huston Loke, Executive Vice President, Market Conduct. “As a result, FSRA is looking at how to best address the issues and potential risks to consumers associated with crypto assets by working with other regulators.”

The proposed guidance sets out:

  • the roles and responsibilities of provincial and federal regulators with respect to trust corporations, which includes crypto custodians
  • factors that FSRA will consider when determining if a corporation needs to register with FSRA under the Loan and Trust Corporation Act (LTCA)
  • FSRA’s approach to registering trust corporations

Crypto custodians that meet the definition of a trust corporation under the LTCA must be registered with FSRA. Unregistered loan and trust corporations, including those that are crypto custodians, are banned from offering their services in Ontario as trustees or bailees of customers’ assets.

To review the proposed guidance and submit your feedback, please visit FSRA’s website. The consultation period is now open and will close on  October 10, 2023.

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FSRA continues to work on behalf of all stakeholders, including consumers, to ensure financial safety, fairness, and choice for everyone.

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