A crypto-backed lending firm has secured exemptive relief from the Canadian Securities Administration (CSA), allowing it to provide crypto-backed loans without the need for traditional dealer registration or prospectus submissions.
“Over the past two years, we created a […] regulatory structure in partnership with the Ontario Securities Commission (OSC) to make this possible, as Canada previously lacked such a framework,” a representative stated. “This exemption applies exclusively to our company and does not set a precedent for others.”
The platform now accepts Bitcoin (BTC) and Ether (ETH) as collateral for loans issued in Canadian or US dollars, with plans to introduce additional digital currencies and fiat options soon.
The firm intends to broaden its presence in the United States, with future expansions aimed at Australia and New Zealand awaiting regulatory consent. The CEO expressed:
“By collaborating with Canadian regulators and paving the way here, we are establishing a new standard for compliance and safety in crypto-backed lending, enabling both retail and institutional borrowers to access liquidity without relinquishing ownership of their digital assets.”
Loan-to-value (LTV) ratios vary between 20% and 60%, with an automated liquidation process commencing at 90% if the borrower does not take steps to bolster collateral or make partial repayments when the LTV hits the 80% warning threshold.
Loan durations extend from three months to five years, highlighting the relatively adaptable nature of crypto-backed lending compared to the often inflexible and less accessible offerings available in conventional financial systems.
This firm is registered with the Financial Transactions and Reports Analysis Centre of Canada (FINTRAC), facing competition in the local market from others like Ledn, Nexo, and YouHodler, among several others.
The CEO speaking at the Blockchain Futurist Conference in 2024.
Related: The implications of Canada’s new Prime Minister on the crypto scene
Canada’s political shifts may impact crypto regulation
The newly elected Prime Minister of Canada, a former central banker, has previously criticized Bitcoin for its capped supply, labeling the 21 million maximum a “serious flaw.”
In a speech at the Scottish Economics Conference in March 2018, he remarked, “Recreating a virtual global gold standard would be an egregious act of monetary ignorance.”
His negative perspective on Bitcoin and cryptocurrencies could shape regulatory approaches in Canada, adding uncertainty to the future of the nation’s crypto sector.
Nonetheless, his 2025 platform aims to establish Canada as a leader in emerging technologies like artificial intelligence and “digital industries” amidst growing geopolitical competition and trade challenges with the United States.
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