The Canadian Securities Administrators (CSA) published a consultation over new rules for funds investing in cryptocurrencies. It covers the eligible types of crypto, restrictions imposed on funds and digital asset custody. In the United States, the SEC delayed the authorization of spot Bitcoin ETFs based on pricing and market integrity concerns. The CSA expressed similar reservations in the document. It’s running a consultation through to April 17.
Hence, it will restrict which crypto-assets are eligible for investment based on whether the assets are traded on a regulated exchange or an associated derivative is traded. However, the funds do not have to acquire crypto via a recognized exchange.
It also bans nonfungible assets. It considers collectibles inappropriate for a financial investment, although we’d note some NFTs are more financial. However, the CSA states its primary concerns are about liquidity and valuation of NFTs. This is a topic it expects to explore during the consultation.
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