The Canadian Securities Administrators and the Investment Industry Regulatory Organization of Canada (IIROC) have jointly proposed a framework for cryptocurrency exchanges that would halt short selling and margin trading of digital assets.
Ban on Cryptocurrency Short Selling and Margin Trading
The Canadian Securities Administrators and the IIROC have filed a joint consultation paper called Proposed Framework for Crypto-Asset Trading Platforms on March 14th, 2019, seeking community feedback regarding the direction cryptocurrency regulations should partake.
At the very beginning of the paper, the regulators outline their main concerns:
Although DLT may provide benefits, global incidents point to crypto assets having heightened risks related to loss and theft as compared to other assets.
The framework, if approved, will likely cause a massive turmoil amid cryptocurrency traders, mainly because it intends to strip them off two of the most commonly used trading instruments, namely, short selling and margin trading.