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Amidst The QuadrigaCX Drama Canadian Regulators Revamp Framework for Crypto Platforms

QuadrigaCX CEO Gerald Cotten and Robertson visited India for their honeymoon. However, on November 30, 2018, just a week later, Cotten, who suffered from Crohn’s disease, reportedly died. As per the exchange, Cotten used to work on his laptop and was the only person with knowledge and access to Quadriga’s cryptocurrency. Following his death, roughly $145 million in cryptocurrencies is still missing.

On March 13th, Robertson issued a announcing that law firm Stewart McKelvey, will no longer represent QuadrigaCX. She further confirms that the death of her husband was  “sudden and unexpected”, addressing the conspiracy theories that suggest that Cotten is still alive and his death is a clever ploy to escape financial troubles.

Read more:QuadrigaCX CEO’s Widow Denies Blames For Hiding Crypto From Creditors

QuadrigaCX Troubled back-story

DecryptIn January 2018, the Canadian Imperial Bank of Commerce (CIBC) froze $30 million of funds belonging to QuadrigaCX because it couldn’t identify the owners of the funds. Customer complaints rained down on QuadrigaCX as people struggled to access their funds. This led to fewer people using the exchange and its daily trading volume dwindled to $600,000 by October 2018.”

Regulatory Actions

On Thursday, the Canadian Securities Administrators (CSA) and the Investment Industry Regulatory Organization of Canada (IIROC) released a consultation paper. The paper proposes a new framework for regulating crypto activity, including:

  • Custody and verification of assets
  • Price determination
  • Surveillance of trading activities
  • Systems and business continuity planning
  • Conflicts of interest
  • Insurance
  • Clearing and settlement
  • Applicable regulatory requirements

proposalWhile the Proposed Platform Framework builds on an existing regulatory regime that was designed for a wide variety of market participants, we recognize that the existing regulatory requirements, and particularly the Marketplace Rules, were designed for marketplaces trading traditional securities (such as equities and debt). The CSA supports innovation in our capital markets while protecting investors and promoting fair and efficient capital markets. We are therefore considering a set of requirements tailored to Platforms’ operations that appropriately addresses the new risks introduced.”

“When looking at the operations of a Platform, we will assess whether a Platform’s risk management policies and procedures are appropriate to manage and mitigate the custodial risks. Expectations will be guided by the operational model of the Platform.  For example, if the trades on a Platform do not occur on the distributed ledger, and instead the Platform keeps track of changes in ownership on its own internal ledger, we will evaluate whether the Platform has a robust system of internal controls, including records, that ensures that a participant’s crypto assets are accurately accounted for by the Platform and appropriately segregated from assets belonging to the Platform.”

Read more:Bittrex To Introduce Initial Exchange Offering Of RAID’s XRD token

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