Adequacy and Gaps in Canada's Crypto Asset Regulatory Framework: A Literature Review of OSC and FINTRAC Registration Requirements

Abstract

Canada has emerged as one of the more proactive jurisdictions in regulating crypto asset trading platforms (CTPs), operating a dual-layer framework that requires compliance with both federal antimoney laundering obligations under the Financial Transactions and Reports Analysis Centre of Canada (FINTRAC) and provincial securities laws administered by bodies such as the Ontario Securities Commission (OSC) and the Canadian Securities Administrators (CSA). This paper conducts a literature review of the existing academic and regulatory scholarship on Canada's crypto registration requirements, examining the development of this framework from 2014 to 2025. Drawing on peerreviewed scholarship in Canadian securities law, international comparative regulation, and decentralized finance governance theory, it explores the effectiveness of the pre-registration undertaking (PRU) system introduced in 2022-2023, the enforcement actions taken against noncompliant platforms, and the outstanding gaps in investor protection, particularly concerning decentralized finance (DeFi) and value-referenced crypto assets (VRCAs). The paper argues that while Canada's approach represents a meaningful advancement in crypto compliance infrastructure, significant regulatory fragmentation across provinces and the rapid pace of technological innovation continue to challenge the framework's adequacy. Implications for retail investor protection and the integration of crypto into the mainstream financial system are discussed.