Crypto Regulation Update: New US and Canadian Rules for Digital Assets
October 8, 2026 | ATN Trade & Finance
The regulatory landscape for digital assets is the most active it has been since the early exchange-licensing fights of 2014 — and several of the most consequential US and Canadian measures are on short deadlines or just took effect. Here is where things stand.
US: Regulation Crypto Assets — Comment Deadline October 20
The SEC's most significant digital asset proposal in years was published in the Federal Register on August 21, 2026 (File No. S7-2026-27) and runs 146 pages with 149 numbered questions. The comment deadline is October 20, 2026 — twelve days away — making this the most immediate action item for any exchange, token issuer, or developer operating in the US market.
The proposal, called Regulation Crypto Assets, creates three structured pathways for projects selling tokens as part of investment contracts:
A startup exemption (Rule 200) allows early-stage projects a four-year development runway with fundraising capped at $5 million total, filed via Form NOR with publicly posted disclosures updated periodically. A fundraising exemption (Rules 300–307) modeled on Regulation A offers Tier 1 up to $20 million (12 months) or Tier 2 up to $75 million (requiring audited financials), filed on proposed Form 1-CRYPTO. An investment contract safe harbor (Rule 400) gives any issuer a path to exit the investment contract classification permanently: once essential managerial efforts are complete, the issuer files Form TR and the SEC takes the position that securities registration and reporting requirements no longer apply to that asset. The definition of "crypto asset" in the proposal aligns with the GENIUS Act stablecoin framework — a signal that a coherent cross-statute taxonomy may finally be converging in Washington.
US: Form 1099-DA Cost Basis Reporting Now Mandatory
A quieter but operationally significant rule takes effect this tax year. For Tax Year 2026, custodial brokers — centralized exchanges including Coinbase and Kraken — must report both gross proceeds and cost basis for digital assets acquired on or after January 1, 2026 and held in the broker's custody. Tax Year 2025 required only gross proceeds. The practical effect: exchanges must now track the acquisition price of all newly custodied assets, and taxpayers will receive reconcilable 1099-DA forms by mid-February 2027. Decentralized exchanges and non-custodial wallet providers remain temporarily exempt.
Canada: FINTRAC Enforcement Escalates
In Canada, the enforcement phase is well underway. By March 2026, FINTRAC had revoked 50 money services business registrations, 47 of them crypto firms, including 23 in a single recent action. The fines have been substantial: Cryptomus was fined $126 million for failing to report more than 1,000 suspicious transactions, and KuCoin was fined $14 million for operating without proper registration. Under March 2026 legislation (Royal Assent March 26), FINTRAC is acquiring a new administrative monetary penalty framework, a statutory program-effectiveness standard, and a formal anonymous client definition that directly affects wallet attribution and beneficial ownership workflows. Stablecoin issuers will be required to register with FINTRAC as money services businesses once implementing regulations take effect — the obligation is law, but the effective date depends on future Orders in Council.
What this means for exchanges and token issuers: The US and Canada are moving in parallel but through different mechanisms — Washington through rulemaking and taxonomy, Ottawa through enforcement and registration. For US market participants, the October 20 comment period is a concrete opportunity to shape how the Regulation Crypto Assets safe harbor works in practice; the SEC's 149 questions are an explicit invitation. For Canadian operators, the registration question is now binary: FINTRAC is actively cancelling registrations of non-compliant firms, and the fines for operating without proper registration are no longer theoretical.
Sources:
- SEC Publishes Regulation Crypto Assets Proposed Rules — Benesch Law
- SEC Seeks Comments on Proposed Crypto Asset Offering Rules by October 20, 2026 — Braumiller Law
- Federal Register: Regulation Crypto Assets (S7-2026-27)
- Form 1099-DA — Wikipedia
- Canada Crypto Crackdown: FINTRAC Cancels 47 Crypto Registrations — Coinpedia
- FINTRAC 2026 Legislative Amendments: What Canadian MSBs, Fintechs and Crypto Platforms Must Know — AML Incubator