Looking for a cryptocurrency lawyer in Toronto? These proposals came when issues at QuadrigaCX, formerly Canada’s largest cryptocurrency exchange, led to calls for regulatory oversight of the notorious industry. Quadriga was granted creditor protection last month.
Recently, a Canadian cryptocurrency exchange QuadrigaCX claims about $250 million of customers’ holdings are stuck in an electronic vault because the company’s founder Gerry Cotten died without sharing the password with anyone.
Other suspicious facts surround the case, and the conspiracies range from Gerry faking his own death in India to run off with the money amid financial trouble to QuadrigaCX operating a pyramid or Ponzi scheme from its inception.
Cryptocurrency Lawyer Toronto
Canadian regulators are proposing new rules that rule over cryptocurrency exchanges and prevent users of these types of trading platforms from losing access to their funds. This is to create new business law.
Specifically, regulators are seeking advice on how current platform and dealer rules should be altered to address the nuances of cryptocurrency trading. Comments are due by May 15, and it’s unclear when the regulations will actually come into effect.
As it stands, there are no cryptocurrency trading platforms recognized as exchanges, marketplaces or dealers in Canada.
This is according to the consultation paper by Investment Industry Regulatory Organization of Canada (IIROC) and the Canadian Securities Administrators (CSA).
Canadian Securities Administrators
Regulators and critics alike have identified several key issues with cryptocurrency exchanges, including how those businesses protect and hold sacred the so-called private keys that are needed to unlock cryptocurrency wallets that hold consumer money.
What this means for everyone? This is great news that Blockchain and Cryptocurrency regulations from Canadian securities regulators are being drafted. The plan appears to have an all-encompassing outlook, including with respect to cybersecurity and business continuity.
As your cryptocurrency lawyers, we will assess the probability of your business being a money services business as a result of “dealing in virtual currencies”, and develop a customized set of compliance strategies and policies.
For example, a lawyer might regularly consider how your particular token-related activities invoke the laws of:
- securities (e.g. ICOs / ITOs, SAFT issues, OSC LaunchPad representation, “securities” trigger, dealer exemptions, prospectus exemptions/private placements, secondary market issues, etc.);
- mutual funds;
- cryptocurrency contracting (e.g. Currency Act, Statute of Frauds, Conveyancing and Law of Property Act, etc.);
- income tax;
- anti-money laundering (AML);
- know-your-customer (KYC);
- financial institution issues (e.g. Bank Act and Trust and Loan Companies Act);
- other fiduciary issues (e.g. trustee/bailee issues, sale of goods, consumer protection, payday loans, general negligence);
- payments-system issues;
- monetary/financial instruments;
Cryptocurrency Lawyer Helping With Virtual currencies
Blockchain lawyers will also determine whether your smart contracts are likely to be considered a service, rather than a security or commodity, for tax and fiduciary purposes.
We provide compliance with regulatory requirements for money services businesses that deal in virtual currencies, under the Proceeds of Crime (Money Laundering) and Terrorist Financing Act and its Regulations.
We will work with you and develop a customized set of compliance strategies and policies that consider your AML position today, and when the new regulations come into force.
Consider the laws of:
- IT contracts with third-party tech vendors;
- node agreements;
- mining coalition agreements;
- data privacy in Canada;
- AI & algorithmic governance in smart contracts;
- corporate veil issues (e.g. regarding operations of a foreign wholly owned subsidiary);
- public international law;
- private international law (i.e. conflicts of laws);
- division of legislative powers;
- Customs Act issues (for import/export of tokens as non-money goods); and
- export controls (i.e. “token coin” as controlled outside “Systems, Equipment and Components”, international trade models).
An attorney can also assess your blockchain business model and operational practices, to consider the extent that your token-related activities invoke Canadian Federal and Ontario laws.
Contact us to learn how to protect your business interests. We will connect you with a law firm.
Author: Alistair Vigier is the CEO of ClearWay Law