Canada

In Canada, the provision of services relating to cryptoassets is generally regulated under Canadian anti-money laundering (AML) Law and Canadian Securities Law (see Question 2, below).

The Proceeds of Crime (Money Laundering) and Terrorist Financing Act (PCMLTFA) defines “virtual currency” as “a digital representation of value that can be used for payment or investment purposes that is not a fiat currency and that can be readily exchanged for funds or for another virtual currency that can be readily exchanged for funds; or a private key of a cryptographic system that enables a person or entity to have access to a digital representation of value referred to prior.” The effect of this definition is to limit the application of AML obligations under the PCMLTFA to services relating to cryptoassets that function as a means of payment or as an investment, and the providers of such services.

The Canadian Securities Administrators (CSA) have published an online investor tool that sets out the following definitions and types of cryptoassets:

• Cryptocurrency: a digital currency or medium of exchange. It can be used to buy products or services, or for speculative purposes, such as trading on a cryptoasset trading platform (CTP). Cryptocurrencies have no inherent value; their perceived value is based largely on supply and demand in the market. Examples include Bitcoin (BTC), Ether (ETH), Ripple (XRP) and Litecoin (LTC).
• Utility tokens: use a distributed ledger or blockchain platform to provide access rights to a specific product or service, or to purchase specific products or services. The provider of the products or services typically issues the tokens, which can only be used within the issuer’s network.
• Security tokens: sold or auctioned in a token-generating event such as an Initial Coin Offering or an Initial Token Offering. These events allow businesses to raise money to fund an idea or business model.
• Non-fungible tokens (NFTs): record ownership of a unique tangible or intangible object, such as a song, digital image, or video. “Non-fungible” means these tokens cannot be exchanged for one another; each one is unique.

Although the CSA’s investor tool does not have the force of law, it reflects the approach taken by the CSA when imposing legally binding terms and conditions of registration on custodial CTPs that are registered as dealers under Canadian Securities Law (Dealer CTPs).

The CSA tool also includes “crypto-related funds” as a type of cryptoasset, with sub-categories for cryptocurrency funds, cryptocurrency exchange-traded funds (ETFs) and “blockchain funds”, which, “invest only in companies that have operations related to blockchain technology.”

In April 2025, the CSA amended its public investment fund rules to include “Public Cryptoasset Funds”; however, the CSA does not define “cryptoasset” in the amendments, and instead offers guidance that, for purposes of the investment fund rule, the CSA “generally consider a cryptoasset to include any digital representation of value that uses cryptograph and distributed ledger technology, or a combination of similar technology, to record transactions.”

The CSA have also published staff notices which express the view that stablecoins may constitute securities and/or derivatives in several Canadian jurisdictions, and established the following categories of cryptoassets:

• Value-referenced cryptoasset (VRCA): a cryptoasset that is designed to maintain a stable value over time by referencing the value of a fiat currency or any other value or right, or combination thereof.
• Fiat-backed cryptoasset (FBCA): a VRCA that seeks to replicate the value of a single fiat currency where the issuer sets aside an adequate reserve of assets denominated in the fiat currency.

The provision of services relating to cryptoassets is generally regulated under Canadian AML Law and Canadian Securities Law. The provision of services related to cryptoassets is also subject to other laws of general application in Canada including consumer protection, privacy/data protection and tax laws.

Canadian AML Law

Canada’s federal AML regime is prescribed in the PCMLTFA, regulations made under the PCMLTFA and guidance issued by the Financial Transactions and Reports Analysis Centre of Canada (FINTRAC) (Canadian AML Law). FINTRAC is informed by the global standards of the intergovernmental Financial Action Task Force, of which Canada is a member.

Canadian Securities Law

In Canada, all 10 provinces and three territories are individually responsible for regulating the securities and derivatives markets in their jurisdiction. Securities regulators from each province and territory have teamed up to form the CSA. The Securities Act of each Canadian jurisdiction, the Derivatives Act or Commodity Futures Act in force in certain Canadian jurisdictions and all regulations, instruments, orders, rules, staff notices and other policy pronouncements made by the securities regulators in the jurisdictions are collectively referred to as “Canadian Securities Law”.

Canada was one of the first countries in the world to permit the public offering of cryptoasset investment funds, with The Bitcoin Fund listing in April 2020. As of September 2025, there were over 30 ETFs and similar products available for trading on Canadian stock exchanges (“Public Cryptoasset Funds”). Public Cryptoasset Funds are permitted to invest in fungible cryptoassets that are listed for trading on, or underlying a derivative that is listed for trading on, an exchange that is recognized by a securities regulatory authority in Canada. Currently, Public Cryptoasset Funds provide investment exposure to one or more of BTC, ETH, XRP and Solana (SOL), and some funds are permitted to stake ETH and SOL.

The CSA have collaborated on regulatory guidance regarding the application of Canadian Securities Law to cryptoassets and cryptoasset market intermediaries. CTPs that offer trade execution and custody services for cryptoassets to Canadian clients are required to register as dealers under Canadian Securities Law, and CTPs that provide automated order-matching facilities for cryptoassets are regulated as marketplaces under Canadian Securities Law.

The CSA have imposed prohibitions and restrictions on trading in certain types of cryptoassets. However, these restrictions apply only to Dealer CTPs. They are not blanket prohibitions which outlaw the use of cryptoassets by Canadians.

The CSA have imposed the following restrictions on dealings in cryptoassets by Dealer CTPs (described further in Question 4, below):

Cryptoassets that are securities or derivatives

Dealer CTPs are prohibited from dealing in a cryptoasset that is, itself, a security or derivative, as determined by a “Know Your Product” due diligence analysis of each cryptoasset which the Dealer CTP is required to perform, including consideration of statements made by the CSA, other regulators in International Organization of Securities Commissions (IOSCO)-member jurisdictions, or the regulator with the most significant connection to the relevant cryptoasset.

Cryptoassets issued by bad actors

Dealer CTPs are prohibited from dealing in cryptoassets issued by or on behalf of a person or company that is or has in the last five years been the subject of an order, sanction, fine, or penalty imposed by, or has entered into a settlement agreement with, a government or government or administrative agency, self-regulatory organization, tribunal or court in Canada or in certain foreign jurisdictions in relation to a claim based on fraud, theft, deceit, aiding and abetting criminal activity, misrepresentation, AML violations, insider trading, market manipulation or allegations of similar conduct.

Investment limits

In some Canadian jurisdictions, including Ontario, Dealer CTPs must cap sales to self-directed retail investors of cryptoassets other than BTC, ETH, LTC, Bitcoin Cash (BCH) and USD Coin (USDC) to a net limit of CAD 30,000 in a 12-month period, with higher limits for investors that meet certain income and asset thresholds.

Proprietary tokens

Dealer CTPs are prohibited from offering proprietary tokens.

Staking services

Dealer CTPs may only offer staking services in respect of stakeable cryptoassets, and in compliance with terms and conditions prescribed by the CSA (Staking T&C). The Staking T&C impose obligations regarding:

• due diligence of stakeable cryptoassets, including operations of the proof-of-stake network, and the validators engaged by the CTP;
• client disclosure regarding staking risks;
• custody and segregation of staked cryptoassets; and
• other investor protection requirements.

Stablecoins

As of December 31, 2024, Dealer CTPs must comply with terms and conditions for trading in VRCAs (VRCA T&C).

All VRCAs offered under the VRCA T&C must be FBCAs which reference CAD or USD on a one-for-one basis, provide redemption rights to account holders and maintain a segregated, liquid reserve of assets that are measured at fair value daily and held with a “qualified custodian”.

All VRCAs offered under the VRCA T&C must be issued by a VRCA issuer that has given a prescribed form of undertaking to the CSA (the VRCA Issuer Undertaking), which requires the issuer to publicly disclose audited annual financial statements, monthly attestation reports and other material information about the VRCA.

In November 2025, the federal government included the Stablecoin Act at part of its Budget Implementation Act which is currently under Parliamentary review. If adopted, this statute will transfer primary oversight of fiat-backed stablecoin issuers that are not regulated as financial institutions to the Bank of Canada, which will regulate such stablecoins as payment instruments, not investments.  A federal government Policy Statement issued on February 9, 2026, clarified that the CSA will retain jurisdiction over stablecoins that are not fiat-backed, as well as the trading of stablecoins on regulated marketplaces and by Dealer CTPs.

The VRCA T&C prohibit Dealer CTPs from offering algorithmic stablecoins and “wrapped tokens”, defined by the CSA as: “cryptoassets created on a blockchain synthetically for a given token on another blockchain, thereby enabling the reference token to be used on a different blockchain.”

Canadian AML Law: dealers in virtual currency

Under Canadian AML Law, an entity that is “dealing in virtual currency” would be considered to be acting as a money services business (MSB) under the PCMLTFA and required to register with FINTRAC as an MSB (if it has a place of business in Canada) or a Foreign MSB (if it does not have a place of business in Canada).

The PCMLTFA does not define “dealing in virtual currency,” but FINTRAC has stated that persons or entities are considered to be “dealing in virtual currency” when they engage either in the business of providing (1) “virtual currency exchange services”, which includes exchanging funds for virtual currency, virtual currency for funds, or one type of virtual currency for another type of virtual currency, or (2) “virtual currency transfer services”, which includes the transfer of virtual currency at the request of a client, and the receipt of virtual currency on behalf of a client. 

An entity is considered a Foreign MSB if it:

• is engaged in the business of providing at least one MSB service in Canada (which includes providing exclusively online virtual currency exchange and/or transfer);
• does not have a place of business in Canada;
• directs its MSB services at persons or entities in Canada (which would include marketing directed to persons in Canada, having a .ca domain name or listing in a Canadian directory); and
• provides these services to clients in Canada.

For Canadian MSBs, the registration process is fairly straightforward. An online form is completed, and provided that the legal entity seeking registration is in good standing and, for an individual, does not have a criminal record for certain listed offences, including money laundering and terrorist financing offences. Foreign MSBs must complete a more detailed form that includes criminal record checks for key individuals. Provided the entity is in good standing and key individuals have a clean criminal record, MSB registrations are approved within six to nine months.

An MSB that offers custodial services to clients for the cryptoassets that it trades and/or remits on behalf of such clients must also register as a Dealer CTP under Canadian Securities Law.

Provincial MSB registration

Provincially, the Québec Money Services Businesses Act requires persons offering virtual currency exchange or virtual currency transfer services in Québec to obtain a license, unless these activities are offered solely as part of activities that are also governed by the Québec Securities Act. Consequently, a Dealer CTP that is registered under securities laws in Québec would not be required to register as an MSB under the Québec legislation.

No other Canadian jurisdiction has adopted AML legislation or an MSB registration regime. In 2023, the British Columbia government introduced MSB legislation, but it will not capture dealing in virtual currencies.

Canadian Securities Law: regulation of CTPs as dealers and marketplaces

In March 2021, the CSA published Joint CSA/IIROC Staff Notice 21-329 Guidance for Crypto-Asset Trading Platforms: Compliance with Regulatory Requirements (SN 21-329), which clarified the CSA’s position regarding when the activities of a CTP engage Canadian Securities Law.

SN 21-329 states that a CTP that offers services for trading in cryptoassets must register as a dealer in securities and/or derivatives if the CTP facilitates the trading of:

• cryptoassets that are securities; or
• cryptoassets that are not, themselves, securities or derivatives, but are held in an account with the CTP, unless the agreement between the CTP and its users “creates an obligation on the CTP to immediately transfer ownership, possession and control to the CTP’s user and as a result there is delivery to the user.”

The CSA refer to the account between a custodial CTP and its clients as a “Crypto Contract”, which is regulated as a security and/or derivative across the CSA.

By establishing the concept of a “Crypto Contract”, the CSA exerted jurisdiction over all CTPs that offer cryptoasset trade execution and custodial services to Canadian residents, notwithstanding that BTC and ETH (and more recently XRP, SOL and many cryptoassets) are generally accepted to be commodities, and not securities. SN 21-329 also states that a CTP that operates an automated order-matching facility on their platform is considered a marketplace for securities or derivatives under Canadian Securities Law and must be recognized or exempt from recognition as a marketplace to offer such services in Canada.

The CSA maintains an online register of Dealer CTPs and banned CTPs at www.securities-administrators.ca/crypto-trading-platforms-regulation-and-enforcement-actions/crypto-trading-platforms-authorized-to-do-business-with-canadians/.

Each Dealer CTP has accepted bespoke CTP T&C, which provides exemptive relief from the prospectus requirement for Crypto Contracts offered by the CTP and imposes obligations on the CTP with a view to reducing the investor protection risks associated with their operations.

Dealer CTPs are restricted from dealing in certain types of cryptoassets, as described in Question 3. Dealer CTPs are also subject to the solvency, proficiency and integrity requirements that apply to all securities registrants.

When the CSA exerted jurisdiction over custodial CTPs in March 2021, it introduced a time-limited interim registration framework, which was intended to provide flexibility to accommodate the differences between cryptoassets and securities. In August 2024, the CSA terminated the interim framework and now requires all custodial CTPs that seek to offer services in Canada to register as investment dealers and become members of the Canadian Investment Regulatory Organization (CIRO). CIRO continues to take a flexible approach towards some aspects of its custody and operational requirements to take into account novel aspects of cryptoasset market structure. However, for most purposes, CTPs must adhere to the same standards as traditional securities dealers, including rigorous capital, insurance, reporting, supervision, proficiency, internal controls and other requirements.

There are currently 11 Dealer CTPs in Canada, five of which are also approved to operate a marketplace.

Enforcement against non-compliant foreign CTPs

Since the publication of SN 21-329, the Ontario Securities Commission (OSC) and the Autorité des marchés financiers (AMF) have taken enforcement actions against multiple foreign CTPs for illegal dealings in securities and derivatives in Canada, focusing on those that offer derivatives and leveraged products. Many foreign CTPs withdrew their services from Canada in March 2023 when the CSA imposed more rigorous oversight requirements on custodial CTPs. The OSC’s enforcement proceedings against foreign CTPs have involved collaboration amongst provincial securities commissions across Canada as well as foreign regulators, such as the British Virgin Islands Financial Services Commission and the Monetary Authority of Singapore.

With the exception of the VRCA Issuer Undertaking described in Question 3, issuers of cryptoassets are not subject to disclosure requirements in Canada. However, Dealer CTPs must publish a “Cryptoasset Statement” for each cryptoasset offered on their platform, which is a “plain language description of each cryptoasset and the risks of the cryptoasset.” The Cryptoasset Statement must state that the CSA has not assessed or endorsed the cryptoasset, and that the Cryptoasset Statement does not avail the purchaser of the statutory rights available to a purchaser of securities under an offering memorandum.

In September 2021, the CSA and CIRO published Staff Notice 21-330 Guidance for Crypto-Trading Platforms — Requirements relating to Advertising, Marketing and Social Media Use (SN 21-330) to remind registered CTPs of regulatory prohibitions against the use of false and misleading advertising and unsubstantiated claims.

SN 21-330 also raises concerns regarding CTPs offering their clients bonuses or rewards based on the level of trading or time-limited promotions that may encourage clients to engage in excessively frequent or risky trading. The CSA remind CTPs that they have an obligation to treat their clients fairly, honestly and in good faith. The CSA also suggest that marketing materials which encourage trading may be considered a form of solicitation and therefore trigger suitability obligations. Such solicitations would contravene representations made by all Dealer CTPs that they do not provide advice or recommendations.

SN 21-330 outlines expectations for Dealer CTPs to supervise their personnel when using social media to communicate with clients and the public for business purposes, including by implementing internal controls designed to prevent misleading and false statements.

CTPs are also subject to federal government guidance on false or misleading representations and deceptive marketing practices provisions of the Competition Act (Canada).

In 2023, the OSC published guidance for registered firms (including Dealer CTPs) regarding digitized marketing partnerships, including those with individual bloggers/influencers, more recently dubbed “finfluencers” by IOSCO and the OSC. The OSC instructs registered firms to “establish policies, procedures and controls to monitor and oversee their arrangements with marketing partners and to verify that claims and statements made about the firm’s products and services are fair, substantiated and not misleading,” including the following:

• reputational due diligence on the finfluencer;
• written agreements with clearly stated purpose, roles and responsibilities;
• ongoing supervisory monitoring and oversight of finfluencers, supported by books and records; and
• disclosure to clients, including compensation earned by the finfluencer and other potential conflicts of interest.

Other provincial securities regulators have also published online guidance for finfluencers and retail investors, focusing on similar themes.

As discussed in Question 3, above, market intermediaries that provide trade execution and custody services for cryptoassets to Canadians are regulated as securities dealers and must register with the CSA and become members of CIRO (Dealer CTPs). Dealer CTPs must hold at least 80% of client cryptoassets with an “Acceptable Third-party Custodian” in a segregated, cold storage custody account. Up to 20% of client cryptoassets may be self-custodied, provided they are segregated from the Dealer CTP’s own assets and held in trust for users, with rehypothecation strictly prohibited.

Generally, an “Acceptable Third-party Custodian” must:

• be regulated as a bank or trust company in their home jurisdiction;
• be functionally independent of the relevant Dealer CTP;
• have audited financial statements within the prior 12 months which confirm that the custodian satisfies minimum capital requirements (CAD 10 million of equity for a Canadian firm and CAD 100 million of equity for a foreign firm); and
• have obtained a Systems and Organization Controls (SOC) 2 Type 1 or SOC 2 Type 2 report, or comparable report, within the last 12 months.

Similar criteria apply to cryptoasset custodians that provide services to Canadian investment funds.

Dealer CTPs and investment fund managers (IFMs) are also expected to conduct due diligence on their custodians and confirm that they have an appropriate level of insurance.

CIRO imposes higher capital requirements for the crypto custodians of Dealer CTPs and also requires the member’s self-custody infrastructure to be audited under SOC or a similar security standard.

Crypto custodians that currently offer services to Dealer CTPs and investment funds in Canada include Tetra Trust Company (based in the Canadian Province of Alberta), and several U.S. custodians including Coinbase Custody Trust Company, Bitgo Trust Company, Gemini Trust Company and Anchorage Digital Bank. None of Canada’s federally regulated financial institutions (FRFIs) currently provide cryptoasset custody services.

Canada’s Office of the Superintendent of Financial Institutions (OSFI) issued guidelines for the regulatory capital and liquidity treatment of exposure to cryptoassets for federally regulated banks, trust and loan companies and insurance companies, which took effect in January 2025 and were amended in November 2025. The guideline generally adopts the approach recommended by the Basel Committee on Banking and Supervision, with both simplified and comprehensive regulatory treatment options, which classify cryptoasset exposures into four categories. The guideline confirms that minimum capital requirements for operational risk and institutions’ risk management sections are also applicable to an institution’s cryptoasset activities, such as custodial services involving the safekeeping or administration of client cryptoassets on a segregated basis, that do not generally give rise to credit, market or liquidity requirements.

CTPs that are registered as MSBs with FINTRAC must have in place an AML compliance program, conduct Know Your Customer checks, report certain types of transactions, appoint a compliance officer, develop policies and procedures, create and maintain a training program and review its compliance program. MSBs must also submit “Suspicious Transaction Reports” to FINTRAC for every financial transaction that occurs or that is attempted in the course of their activities where there are reasonable grounds to suspect that the transaction is related to the commission or the attempted commission of a money laundering, terrorist activity financing or sanctions evasion offence.

FINTRAC’s “Money laundering and terrorist financing indicators — Virtual currency transactions,” delineates red flag indicators for suspicious virtual currency transactions, including categories dealing with the virtual currency transaction’s nature, patterns, anonymity levels, sender or recipient details and source of funds.

FINTRAC has levied two large administrative monetary penalties (AMPs) against non-Canadian CTPs that offered services in Canada: Peken Global Ltd. DBA KuCoin received an AMP of CAD 19.6 million in September 2025 while Binance Holdings (IE) Ltd. and its affiliates received an AMP of approximately CAD 6 million in May 2024. Both AMPs included penalties for failing to register as a FMSB and failing to report certain transactions. Both KuCoin and Binance are appealing the AMPs on the basis that registration was not triggered because the platform did not direct services toward Canadians.

In November 2025, FINTRAC imposed an AMP of CAD 176.9 million on Xeltox Enterprises Ltd. (operating as Cryptomus), a Canadian CTP registered as an MSB with FINTRAC, for failing to submit thousands of transaction reports, failing to develop and apply AML compliance policies and procedures, failing to conduct risk assessments and other technical violations. FINTRAC’s public notice of AMP indicates that FINTRAC has evidence that Cryptomus was used to send or receive virtual currency from addresses known to be associated with darknet marketplaces, involving persons or entities known to be linked to criminal activities, having transactional exposure to virtual currency exchanges or services located in Russia or other high-risk jurisdictions with weak AML regulations and virtual currency addresses that match addresses on recognized watch lists such as the list maintained by the U.S. Office of Foreign Assets Control.

While Canadian courts have generally declined to opine on whether cryptoassets are property, they regularly recognize and enforce property rights over cryptoassets. Courts have enforced a lender’s security interest over pledged digital assets in insolvency proceedings, ordered restitution and forfeiture of cryptoassets in criminal sentencing, and included cryptoassets as matrimonial property in family law orders.

Notably, in Ramirez v. Ledn Inc. 2023 ONSC 3716 (CanLII), a case in which a borrower lost his bitcoin collateral due to a margin call, the Ontario Superior Court ordered for a plaintiff’s claim of conversion to be stricken because “Bitcoins are intangible property. It follows that the tort of conversion does not apply to Mr. Ramirez’ property rights in bitcoins.”  

Previously, in In the Matter of the Bankruptcy of Quadriga Fintech Solutions Corp. et al. (Ontario Superior Court of Justice. March 1, 2021) (Quadriga), the court held that the definition of property in the Bankruptcy and Insolvency Act (BIA) is “broad enough to include cryptocurrency.”

Canadian courts have issued preservation orders and freezing orders over cryptoassets that are the subject of civil claims, as discussed in Question 11, below.

Additionally, NFTs are capable of being recognized as property, much like other intangible assets fixed in a material form. NFTs can also represent copyrighted works, but the ownership of these works resides with the copyright holder, not solely with the individual who mints the NFT. Indeed, contract terms often govern the rights associated with NFTs, and copies of the digital content are frequently subject to restrictive licenses.

The Canada Revenue Agency (CRA) published guidance in 2014 (updated in 2021) stating that cryptocurrency is treated as a commodity for income tax purposes. Additionally, the Dealer CTP framework, described in Question 4, above, is focused on protecting the ownership rights of investors that hold cryptoassets in custodial accounts on online trading platforms.

Consequently, even in the absence of legislation or case law which explicitly confirms that cryptoassets are property in Canada, the proprietary interests of Canadians in cryptoassets are regularly recognized by lawmakers, regulators and the courts.

That being said, unlike the United States, no steps have been taken to amend the personal property security legislation in force in each Canadian jurisdiction to establish a specific regime for perfecting security interests in cryptoassets, similar to Article 12 of the Uniform Commercial Code (UCC). As with previous amendments to the UCC, we expect Canadian jurisdictions will adopt amendments similar to Article 12 of the UCC in the future, however, a formal process has yet to be initiated to achieve this objective.

There is no specific registration regime for DAOs in Canada or in any Canadian jurisdiction. Nor is there a consensus on how DAOs should be characterized as a legal entity.

In the 2018 decision Autorité des marchés financiers (AMF) c. CreUnite, 2018 QCTMF 8 (CreUnite), the Québec Financial Markets Administrative Tribunal issued a cease trade order and other remedies against eight individuals involved in a cryptoasset project that had identified itself as a DAO on its website. The Tribunal held: “in the presence of an entity that apparently does not possess a legal personality … it [is] appropriate to make these orders against persons who reportedly identify themselves on the CreUnite website as the founders of this group.”

In the absence of any specific precedent, we believe that Canadian courts and administrative tribunals may adopt an approach similar to CreUnite in a matter where there is evidence that an identifiable group of individuals responsible for a DAO’s activities, are within the jurisdiction of the court or tribunal and are engaged in alleged illegal distributions of securities or other misconduct. In Canada’s common law jurisdictions (outside of Québec), the individuals in the purported DAO could be considered partners in a general partnership, or members of an unincorporated association, and therefore jointly and severally liable, with all other partners or members, for the liabilities of the partnership or association.

There is no legislation in Canada which prescribes rules that would apply specifically to cryptoassets held by an insolvent debtor. Accordingly, insolvencies involving cryptoassets and/or cryptoasset market intermediaries are governed in accordance with general insolvency law in Canada, including the BIA and the Companies’ Creditors Arrangement Act (CCAA).

The collapse of Quadriga Fintech Solutions Corp. and its affiliates in March 2019 has been the most significant cryptoasset insolvency filing under the CCAA or BIA. Quadriga had been one of Canada’s largest cryptocurrency exchanges, with CAD 215 million owed to accountholders at the time creditor protection was sought.

In Quadriga, the court noted that the BIA’s definition of “property” is broad enough to include cryptocurrency, and therefore a bankrupt’s cryptocurrency is property that is divisible amongst its creditors. The court also found that cryptocurrency claims are liquidated claims analogous to debts in a currency other than Canadian currency that should be valued as at the date of bankruptcy under the BIA. While the court did not determine whether cryptocurrency was a “security” or other specific type of asset, the court analogized the bankruptcy of Quadriga to the bankruptcy of a securities firm and noted that cryptocurrency could be analogized to a security.

In Autorité des marchés financiers c. Lacroix, 2018 QCCS 3062 (PlexCoin), the Superior Court of Québec dealt with companies involved in the solicitation of investments for the new cryptocurrency “PlexCoin”. This process took place outside the usual regimes of bankruptcy and restructuring using Québec securities legislation. At the request of the AMF, a receiver was appointed over the property of the principal and his related companies, including all BTC. Subsequently, the AMF obtained orders to allow the receiver to make a distribution to reimburse the investors in the PlexCoin project, and finally sanctioned a plan of distribution in favour of all of the principal’s creditors, including the allegedly defrauded investors in the cryptocurrency.

Canadian courts have also recognized two foreign cryptocurrency insolvencies pursuant to the insolvency recognition processes in the BIA and CCAA. First, MtGox Co. Ltd (Re), 2014 ONSC 5811, which recognized the Japanese insolvency proceeding as a foreign main proceeding, and second, In The Matter of Voyager Digital Ltd., 2022 ONSC 4553 (Voyager), which recognized the U.S. Chapter 11 proceeding of Voyager as foreign main proceedings, notwithstanding that the head office for Voyager was in Canada and its shares were listed on the Toronto Stock Exchange. In finding the centre of main interest of Voyager was in the US, the court noted that its entire cryptocurrency business was run out of the U.S. and it did not have any Canadian customers.

In Canada, there are no federal or provincial statutes, regulations or case law that have specifically addressed the extent to which a smart contract may be a legally enforceable contract. Consequently, the enforceability of a smart contract will likely depend on whether the smart contract exhibits the four elements of a contract at common law, specifically: offer, acceptance, consideration and capacity of the parties to understand the terms of the contract.

Electronic contracts are generally recognized to have the same legal effects as contracts in print or in writing. Electronic commerce laws throughout Canada are intended to give effect to electronic contracts and such documents will be recognized to have the same legal effects. There is therefore good reason to believe that a smart contract that otherwise meets the certainties required for contracts will be enforceable, notwithstanding that it comes into existence through electronic means.

Canadian courts routinely enforce click-wrap and other online agreements where a user manifests consent to the online agreement. While challenges exist concerning browse-wrap agreements, we do not believe these issues should serve as a deterrent to enforcing a smart contract if its terms are willingly consented to by properly informed users. However, the enforceability of such contracts will always be fact-specific and remain subject to legal doctrines affecting contract validity, such as unconscionability, fraud, or misrepresentation.

Electronic commerce laws in Canada generally recognize contracts entered into by electronic agents, as contemplated in the United Nations Model Law on Electronic Commerce and section 22 of the Uniform Electronic Commerce Act (Consolidation 2011) and within the boundaries prescribed by that model law.

The “Code is Law” doctrine was considered in the Ontario case of Cicada 137 LLC v. Medjedovic, 2022 ONSC 369 (Cicada 137). Cicada 137 is a civil action commenced against a 19-year-old math genius who exploited a vulnerability in a decentralized finance protocol to transfer ETH worth CAD 15 million into digital wallets he controlled. The defendant admitted to moving the ETH, but asserted that his actions were lawful: “he did no more than what the code allowed and the code is law.” However, the defendant refused to appear before the court and went into hiding in December 2021 after the court ordered for the disputed ETH to be deposited with a neutral custodian so that a fair hearing could proceed. While the defendant has moved the disputed ETH since being served with the preservation order, the warrant for his arrest is outstanding, and the merits of the “Code is Law” doctrine have yet to be considered by the court.

The CSA has brought numerous enforcement proceedings against fraudsters in the cryptoasset markets, and regulatory tribunals have ordered sanctions including disgorgement, monetary penalties, and capital markets bans. For example, in Re Smillie, 2024 BCSECCOM 496 (CanLII), the British Columbia Securities Commission (BCSC) ordered disgorgement of CAD 10.4 million and a CAD 8 million penalty against the operators of “ezBTC,” an online platform that solicited deposits of BTC and ETH, promising to hold the assets safely in cold storage and pay a 9% annual return, and then transferring the funds to gambling websites. The British Columbia Court of Appeal rejected the appellants’ challenge of the BCSC’s valuation methodology as “arbitrary,” finding that the approach satisfied the requirement for a “reasonable approximation” of the amount obtained by the violation, which occurred over several years of volatile cryptoasset prices. The fraudsters are also banned for life from the securities industry in British Columbia.

In proceedings alleging fraud or similar misconduct relating to cryptoassets, Canadian courts have granted equitable remedies for the purpose of preserving evidence and freezing cryptoasset accounts where the cryptoassets were the subject of the legal proceeding and other relevant tests for the remedy were met.

In addition, the Québec FMAT has ordered cryptoassets to be cease traded or frozen in the context of regulatory investigations of alleged illegal distributions of securities. In CreUnite, the Tribunal ordered for service of a cease trade order relating to a pending token pre-sale by a group that identified itself as a DAO through the CreUnite Facebook page and the AMF website.

Preservation orders

Courts in Ontario and British Columbia have granted preservation orders relating to cryptoassets upon being satisfied that the common law test is met.

The terms of each preservation order required the defendants to produce relevant computer hardware for inspection and to transfer disputed cryptoassets to a third-party custodian for safekeeping while the claim proceeded in court on the merits. When considering the balance of convenience, the courts noted that cryptoassets can be easily moved or lost at great risk to the plaintiff and the preservation orders would cause little apparent harm to the defendants. As with any order, parties have the ability to apply for a variance of its terms.

Anton Piller Orders

In two Ontario cases, the court granted an Anton Piller Order (also known as a civil search warrant) related to the preservation order to allow the plaintiff to search for and seize the cryptoassets that are the subject of the preservation order.

In Cicada 137, the Anton Piller Order allowed the plaintiff to seize the defendant’s laptop computer and other hardware devices for the purpose of locating passcodes to the defendant’s cryptoasset wallets which held CAD 15 million of ETH, alleged to have been stolen from the open-source Index Finance protocol. However, the defendant went into hiding and the plaintiff was unable to locate the passcodes on the seized devices.

In Kirshenberg v. Schneider, 2023 ONSC 2809, the court appreciated the risk that the defendant could use his phone to transfer USD 350,000 of ETH that was to be preserved for the purpose of satisfying alleged settlement payment obligations to the plaintiff. While the court rejected the plaintiff’s proposal for the defendant to give sworn evidence in court on the day of execution of the order about his digital wallet passcode, it accepted the proposal for an independent solicitor to be present for the defendant’s phone call to confirm that the defendant was speaking to counsel. To protect the privilege of the conversation, the court ordered for the independent solicitor to wear noise-cancelling headphones after confirming that the call was with counsel.

Mareva (freezing) Orders

A Mareva Order is a pre-trial injunction that restrains a party in litigation from dissipating assets or removing assets from the jurisdiction. Distinct from a preservation order, a Mareva Order is an extraordinary remedy, which will be granted before judgment and only if the court is persuaded that the common law test is met.

In Li et al. v. Barber et al., 2022 ONSC 1176 (Li v. Barber), the Ontario Superior Court of Justice issued a Mareva (i.e., a freezing) injunction in the context of a proposed class proceeding brought by Ottawa citizens against organizers, supporters and participants in the “Freedom Convoy” blockade of downtown Ottawa in protest of Canada’s COVID-19 restrictions. The injunction froze money and cryptoassets which had been donated to convoy organizers based on evidence that the organizers had promoted cryptoasset donations as a means of evading an earlier Criminal Code restraint order freezing donations made through an online funding platform. While the class has yet to be certified, the defendants’ motions to dismiss on public interest grounds was unsuccessful, and in October 2025, two leading defendants in the class action were convicted of mischief and sanctioned to 12 months at home, followed by six months under a 10 p.m. curfew.

The Mareva injunction issued in Li v. Barber was a temporary measure issued at a time when the federal government had invoked the Emergencies Act (Canada) to address the security risks posed by the Freedom Convoy. Although some other applications for Mareva Orders to freeze cryptoassets have been rejected, the Ontario Superior Court of Justice issued another Mareva injunction in McRae-Yu v. Profitly Inc., et al, 2024 ONC 1593 (CanLII). The plaintiff proposed to represent a class of NFT purchasers that were victims of an alleged “slow rug pull” by the creators of the “Boneheads” NFT collection shortly after the mint raised over CAD 4 million worth of ETH. The court found that there was prima facie evidence of fraudulent misrepresentation, and therefore a real risk of dissipation of assets could be proven by inference. While the plaintiff’s personal losses were CAD 15,000 and therefore could be considered immaterial, the court assessed the risk of irreparable harm that would be suffered by the class as a whole if the injunctions did not continue.

The CRA published guidance in 2014 (updated in 2021) stating that cryptocurrency is treated as a commodity for income tax purposes. When a Canadian disposes of a cryptoasset, whether for fiat or in exchange for another cryptoasset, the resulting gain (or loss) may generate business income (or loss) or a capital gain (or loss), depending on the facts and circumstances. The full amount of profits/gains (or losses) from the disposition must be reported in the holder’s tax return.

The CRA considers receipts of crypto in exchange for goods and services to be barter transactions, which are also reportable in the holder’s tax returns. Generally, the CRA accepts a cryptoasset’s fair market value for tax reporting purposes, using a reasonable, consistent basis for determining value even when a direct value is not readily available. The CRA requires each type of cryptoasset to be valued separately, and encourages taxpayers to keep good records of their cryptoasset transactions, including by exporting records from Dealer CTPs where they may hold and trade cryptoassets.

In January 2025, the CRA published guidance confirming that that there is no disposition when a taxpayer deposits cryptoassets into an account with a Dealer CTP or stakes cryptoassets held in such account using services provided by that Dealer CTP. The CRA’s position is based on the fact that Dealer CTPs hold cryptoassets in trust for the clients and do not acquire beneficial ownership of the deposited or staked crypto.

The CRA requires the value of cryptoassets earned from mining activities to be included in income at the time it is earned. Generally, if a taxpayer conducts mining activity with the intention of profiting in a businesslike manner, the taxpayer is carrying on a business with respect to that activity, and could deduct the value of their mining equipment. Although the CRA has not published guidance regarding the taxation of staking rewards, it is reasonable to conclude that staking rewards should be included in income in the taxation year when those rewards are earned.

Businesses that accept cryptoassets as payment for taxable property or services, or exchange a taxable property or service for cryptoassets, must calculate the value of the cryptoasset for goods and services tax (GST)/harmonized sales tax (HST) (consumption tax) purposes based on its fair market value at the time of the transaction. Transfers of cryptoassets that meet the definition of “virtual payment instrument” in the Excise Tax Act (Canada) are exempt supplies of financial services in respect of which GST/HST is not imposed and in respect of which input tax credits (ITCs) are not available. Virtual payment instruments generally include fungible cryptocurrencies that function as a medium of exchange and exist on public distributed ledgers, other than VRCAs and gaming tokens. Transfers of cryptoassets that are not virtual payment instruments are generally treated as taxable supplies of intangible personal property in respect of which GST/HST is payable and ITCs may be claimed, subject to limited exceptions.

Dealer CTPs in Canada are subject to local data protection laws, including the federal Personal Information Protection and Electronic Documents Act and substantially similar provincial statutes in Alberta, British Columbia and Québec (collectively, “Canadian Privacy Laws”). These laws protect customers’ personal and transactional data and require organizations to implement appropriate safeguards. Canadian Privacy Laws also impose breach reporting obligations (i.e., if a security incident involving personal information poses a “real risk of significant harm” to individuals, the Dealer CTP must notify the relevant privacy commissioner and affected customers). In practice, this means crypto trading platforms must obtain proper consent for data use, only use that data in line with the relevant consent, keep customer information confidential, and promptly disclose serious data breaches to relevant regulators and the impacted customers.

In addition, Dealer CTPs have explicit cybersecurity requirements under Canadian Securities Law. As registered dealers and members of CIRO, Dealer CTPs are expected to maintain robust cybersecurity programs and internal controls to protect client assets and information. The CSA and CIRO have mandated that Dealer CTPs adopt industry-standard cyber safeguards (such as encryption, secure access controls, and incident response plans) and adhere to mandatory incident reporting rules.

 Canadian regulators have made it clear that compliance with privacy law alone is not sufficient given the heightened cyber-risk in crypto trading; Dealer CTPs are expected to go further by meeting sector-specific standards and reporting in the event of a breach of a Dealer CTP’s information systems that could harm customers (for instance, risk of financial loss or identity theft). This layered oversight by privacy commissioners, the CSA, and CIRO ensures that customers’ personal data and crypto holdings are rigorously safeguarded and that any breach is addressed transparently and swiftly.

Staking

When staking services are offered by a Dealer CTP, the CSA takes the position that such services engage securities laws. Each of the CSA and CIRO have developed terms and conditions with which Dealer CTPs must comply when staking client cryptoassets, including the following:

• Dealer CTPs may only offer staking services for cryptoassets that use a proof of stake consensus mechanism, and the staked cryptoassets must be used to guarantee the legitimacy of new transactions on the blockchain.
• Staked cryptoassets must be held with the Dealer CTP’s Acceptable Third-party Custodian.
• Staked cryptoassets must be held in digital wallets that are separate from the unstaked cryptoassets held on behalf of that Dealer CTP.
• Dealer CTPs must conduct due diligence of validator.
• Dealer CTPs must provide risk and fee disclosure for their staking activities.
• Dealer CTPs must take steps to ensure that staking is appropriate for its clients.

The CSA has imposed similar requirements on Public Cryptoasset Funds that engage in staking activities, which generally arise from the fiduciary duties owed by an IFM to its funds. While the CSA have not imposed hard caps on the percentage of fund assets that an IFM may stake, the current practice adopted by IFMs is to stake up to 50% of the assets of ETH and SOL ETFs, and up to 75% of the assets of closed-end funds, have regard to their lower liquidity needs.

Outside of the CSA’s regulated trading platforms and funds, Canada is home to several blockchain infrastructure providers that offer staking services to institutions on a commercial basis. The CSA has not attempted to apply Canadian Securities Law to these service providers, presumably based on the understanding that such services are provided under negotiated, arm’s length contracts between sophisticated parties.

In addition, several companies that are listed on Canadian securities exchanges as traditional (non-ETF) issuers hold cryptoassets such as SOL and TAO in their treasuries, and stake such cryptoassets using a combination of proprietary and third-party validators. Unlike ETFs, which are not permitted to carry on active businesses, these issuers are permitted to operate their own validators, and generally are taxed on their staking rewards as income at the time these are received.

Decentralized Finance (DeFi)

Generally, the CSA has not attempted to enforce securities legislation against providers of non-custodial services related to cryptoassets, such as the operators of self-hosted wallets, decentralized exchanges (DEXs), bridges or other DeFi protocols (Non-Custodial Service Providers). The CSA have prioritized centralized platforms which expose their users to counterparty risk, in particular insolvency risk, as illustrated by the CSA’s regulatory framework for Dealer CTPs and enforcement proceedings which have focused on custodial CTPs and a handful of identifiable cryptoasset issuers.

However, the CSA have not conceded that Non-Custodial Service Providers are beyond their purview. On the contrary, in 2021, the OSC and most other CSA members refused to approve the acquisition of a Dealer CTP by WonderFi, a public company that had recently launched a non-custodial DeFi wallet, until the company agreed to geo-block users in their jurisdictions from accessing the DeFi wallet.

More recently, in July 2024, the OSC and Bank of Canada published a discussion paper on automated market makers (AMMs) in alignment with recommendations made by IOSCO for securities regulators to “analyze DeFi arrangements to assess any potential regulatory responses.” The paper notes IOSCO’s affirmation that “where DeFi activities and arrangements mirror traditional financial markets, a ‘same activity, same risk, same regulation/regulatory outcome’ approach should be adopted.”

In April 2025, OSC v. Blockratize Inc., 2025 OCMT 7 (CanLII) became the first public enforcement proceeding by a CSA member against a Non-Custodial Service Provider. Notably, the respondents did not admit to distributing, dealing, advising in or operating a marketplace for securities or derivatives. Rather the sole admission was a breach of the prohibition against offering binary options to the public. While the settlement acknowledged the non-custodial nature of users’ trading activities, the OSC focused on how the Polymarket user interface provided users with “access to … underlying … smart contract protocols” and appeared to “solicit participation and trading in Contracts.”

Conversely, in the August 2025 case of Autorité Des Marchés Financiers (AMF) v. Alexandre Gagnon [Decision No. 2024-033-002 August 22, 2025], the Québec FMAT adopted a narrow interpretation of “investment contract” when concluding that the trading activities of a crypto “finfluencer” and his subscribers on the Uniswap DEX did not constitute advising in securities and market manipulation. The tribunal confirmed that the AMF had prima facie evidence that the respondents engaged in a “pump and dump” scheme; however, secondary market trades on DEXs did not have the aim of participating in the financing of a venture underlying the tokens, but rather were conducted for purely speculative purposes. The tribunal rejected the AMF’s allegation that the respondents were advising in securities or manipulating markets in securities, largely because the AMF had not proven that cryptoasset tokens were, themselves, securities. The AMF has appealed the tribunal’s decision to the Court of Québec.

While we do not expect the CSA to take immediate steps to bring AMMs or other DeFi protocols within the regulatory perimeter of Canadian securities law, it appears that the OSC and AMF will not hesitate to seek to apply existing securities laws to DeFi service providers in the face of investor protection or market integrity issues. It is likely that the CSA will continue to monitor DeFi market activity for evidence that it can create systemic risk within the traditional financial system. The systemic risk potential associated with DeFi is expected to increase as the traditional economy and the digital economy become more interconnected.

In November 2025, the federal government included the Stablecoin Act at part of its Budget Implementation Act which is currently under Parliamentary review. The proposed legislation will require issuers to maintain and manage adequate asset reserves, establish redemption policies, implement risk management frameworks, and protect the sensitive and personal information of Canadians. The legislation will also include national security safeguards to support the integrity of the framework so that fiat-backed stablecoins are safe and secure for consumers and businesses to use.

The Bank of Canada will administer the new regime. Related amendments to the Retail Payment Activities Act (RPAA) will also be made to enable the regulation of payment service providers that carry out payment functions using prescribed stablecoins. To date, the RPAA has expressly excluded digital assets from the scope of payment activities that must be conducted by registered payment service providers.

This is a landmark event for Canada’s crypto asset industry, which has been lobbying the federal government for years to bring Canada into step with other jurisdictions that are regulating stablecoins as electronic money or payment instruments. Canada has been the only major economy attempting to regulate stablecoins as securities, using a disclosure-based framework ill-suited to addressing the safeguarding and liquidity risks associated with stablecoins.

Now that most Dealer CTPs have become CIRO members, it is expected that CIRO will work with the industry to codify requirements for custody, staking and other operational matters that have historically been addressed case by case. In February 2026, CIRO published a Digital Asset Custody Framework that applies to crypto as well as other tokenized assets, such as tokenized securities. This guidance is an example of the anticipated convergence of the regulation and activities of Dealer CTPs and traditional investment dealers.