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1.INTRODUCTION
Cryptocurrencies and crypto assets have become almost mainstream; now you can even buy crypto in ATMs in large cities across the world. According to CoinMarketCap, there over 2000 crypto assets available for trading on over 200 exchanges or platforms.1 Still, "crypto" is a scary word to many people. When Bitcoin first emerged and other cryptocurrencies followed, that fear was born mostly out of ignorance - the fear of the unknown and of a technology that was challenging the very foundations of our government-centric economic system predicated on centralized banking. Now, the source of that fear has shifted somewhat, becoming less about the dark shadows and more about protecting one's assets. Recent events in the quasi-regulated world of crypto have given individuals good reason to fear getting involved with crypto asset trading. Accordingly, governments across the world have taken note of the need to protect investors in the crypto space, and this article aims to shed some light on the Canadian experience thus far.
We begin with a short discussion of the emergence of the cryptocurrency movement followed by a brief overview of some of the international regulatory responses. We then move into a closer analysis of the Canadian regulatory landscape and the specific regulatory framework for crypto asset platforms proposed by the Canadian Securities Administrators in March 2019. We next proceed into a discussion of the fintech community's response to these proposals with an aim to identify the themes and trends that best represent the perspectives of the community at large. We also bring in a discussion of Canada's anti-money laundering legislation, as recent amendments have extended its application into the world of virtual currencies. The ultimate goal of this article is to assist in the identification of the real challenges existing in the attempt to regulate crypto assets, as well as to highlight potential solutions and innovations available to both regulators and the individual players involved with crypto asset trading.
2.THE RISE OF CRYPTO AND THE GROWING NEED FOR REGULATION
The idea of an anonymous, decentralized digital cash ecosystem dates back to the 1980s with the writings of Dr David Chaum.2 However, it was not until computational power caught up with the theory that what we now know as "cryptocurrencies" or "crypto assets"...