Canadian Regulators Receive Ideas From Actual Crypto Asset Users on How to Regulate the Market
Cryptocurrency investors and enthusiasts in Canada can share their ideas with local regulators about how to monitor the crypto space. The Canadian Securities Administrators and the Investment Industry Regulatory Organization of Canada signed a joint consultation paper called “Proposed Framework for Crypto-Asset Trading Platforms.” One of the main goals is to avoid manipulation in the crypto space.
Users Can Provide Insight About How To Monitor The Market
One of the topics that generate controversy for regulators is short-selling Bitcoin (BTC) and other digital currencies. This happened when virtual currencies could keep growing for long periods of years. However, due to the bear market that we have been since 2018, short-selling could have returned.
Shorts is the action of betting that a security price will fall in the future. The opposite bet, a bet for something will grow up in price in the future, is called a long.
The paper released by Canada about short-selling says:
“To reduce the risks of potentially manipulative or deceptive activities, in the near term, we propose that platforms not permit dark trading or short-selling activities, or extend the margin to their participants. We may revisit this once we have a better understanding of the risks introduced to the market by the trading of crypto assets.”
It is possible for these traders hat short or long an asset to make large amounts of money or lose as well. If there are short positions opened, it can make long-term investors nervous. Indeed, these shorters could simply be accused of trying to make a company’s stock price fall. Elon Musk, for example, the CEO of Tesla, explained that short-sellers that drive the company's stocks down should be illegal.
The main question is whether regulatory agencies should allow or not individuals and investors tho short assets. Canadians will be providing information about this issue and how to mitigate the risks.
The cryptocurrency market has been in a bear trend since the beginning of 2018 and several digital assets have lost between 80% and 90% of their price, including Bitcoin and the most popular digital assets in the market.