The Canadian Securities Administrators (CSA) has provided guidance on disclosure provided by issuers of crypto assets. The CSA is a group that represents provincial securities regulators. In Canada, there is no federal agency overseeing the securities sector.
According to the CSA, in Canada, most crypto-asset reporting issuers started entering the public markets in 2017 or 2018 through a restructuring transaction with, or a change of business by, an existing reporting issuer. By now, most of these reporting issuers completed their first annual disclosure filings in 2019 for their annual reporting period ending in 2018.Thus there has been sufficient time for staff observations from their review of these initial disclosures.
The CSA notice outlines the disclosure expectations of CSA staff in areas such as safeguarding crypto assets, the use of crypto-asset trading platforms, risk factors, material changes and promotional activities. The notice also provides guidance to crypto asset issuers on navigating certain complex accounting and disclosure issues.
The CSA said it will continue to evaluate the disclosure of reporting issuers engaged in crypto asset-related activities and will consider the need for further guidance or policy changes.
“The crypto asset industry is relatively nascent and notably presents unique accounting issues and auditing challenges,” said Louis Morisset, CSA Chair and President and CEO of the Autorité des marchés financiers. “This guidance is meant to support crypto asset reporting issuers in providing the information necessary for investors to make informed investment decisions.”