An extract from The Virtual Currency Regulation Review - 2nd edition

Looking ahead

To achieve a balance between investor protection and innovation, the CSA has introduced the CSA regulatory sandbox, an initiative to support financial technology businesses seeking to offer innovative products, services and applications in Canada. The initiative, along with province-specific initiatives such as the OSC's Launchpad, allow firms to register or obtain exemptive relief from securities law requirements, or both, under a faster and more flexible process than through a standard application, to test products, services and applications in the Canadian market on a time-limited basis. Regulated offerings of virtual currencies such as Impak Coin, FNDR and ZED and approvals of virtual currency investment funds, represent early success stories of the CSA regulatory sandbox.

Market events such as those described in this chapter have highlighted certain risks that the CSA is seeking to address through rule-making and exemptive relief. However, it is clear that while Canadian securities regulators will attempt to make and enforce rules that foster innovation, and fair and efficient capital markets, they will seek to prioritise investor protection, particularly in the retail space.