Crypto Regulation Update: New US and Canadian Rules for Digital Assets
October 20, 2026 | ATN Trade & Finance
With the US Senate failing to advance the CLARITY Act last month, federal crypto regulation in both countries is moving through agencies rather than legislatures — producing a patchwork of proposed rules, temporary relief orders, and reporting mandates that businesses need to map now.
SEC: Regulation Crypto Assets Comment Period Closes Today
The comment deadline for the SEC's Regulation Crypto Assets — proposed in August 2026 — falls today, October 20. The proposal is the most comprehensive attempt yet by the SEC to create a workable legal framework for token issuers. Three provisions matter most. The Startup Exemption (Rule 200) allows early-stage projects to issue up to $5 million in tokens over a four-year window without full Securities Act registration. The Fundraising Exemption (Rules 300–307) creates two tiers modeled on Regulation A: Tier 1 caps offerings at $20 million per year, Tier 2 at $75 million per year (Tier 2 requires audited financials; both tiers require mostly US-based officers, assets, and administration). Most significantly, the Investment Contract Safe Harbor (Rule 400) would allow a token to cease being treated as an investment contract — permanently — once its issuer has stopped essential managerial efforts, made no new promises to holders, and filed a Form TR with the SEC. The safe harbor has no time limit and is available to any issuer.
Separately, the SEC has already issued a temporary Innovation Exemption allowing tokenized NMS stocks to trade on permissioned automated market maker platforms without those venues being classified as registered exchanges. That relief runs through September 17, 2031.
CFTC: Retail Crypto Rulemaking Launched October 5
On October 5, the CFTC issued an Advance Notice of Proposed Rulemaking outlining "Regulation CTX" and "Regulation CAM" — a framework that would require retail crypto trades involving leverage, margin, or financing to take place on CFTC-registered platforms until customers take actual delivery by moving assets to a self-custody wallet. Once delivery occurs, the CFTC's antifraud and antimanipulation authority still applies, but the on-exchange requirement ends. The CFTC explicitly acknowledges it cannot require all crypto trading on its venues without congressional authorization. Comments are due 60 days after Federal Register publication; as of last week that notice had not yet appeared.
Canada: Stablecoin Act in Force, CARF Reporting Begins
Canada's Stablecoin Act received Royal Assent in March 2026, transferring oversight of fiat-backed stablecoin issuance to the Bank of Canada and treating these instruments as payment tools rather than securities. Issuers must hold highly liquid reserves with regulated Canadian custodians; a full operational framework is expected in 2027. Offshore stablecoins that don't meet Canadian reserve and audit requirements are now restricted on Canadian platforms.
Simultaneously, Canada has adopted the OECD Crypto-Asset Reporting Framework (CARF). Crypto platforms must report 2026 user activity to the CRA in 2027, covering asset type, fiat value at transaction time, and wallet addresses involved. FINTRAC has also tightened KYC rules to require Tax Identification Number validation for account holders — discrepancies can trigger asset freezes.
OSC Stablecoin Relief: A Viable Pathway for US Firms
The Ontario Securities Commission granted US crypto infrastructure firm ZeroHash a registration exemption on July 30, 2026, allowing it to trade USDC and QCAD stablecoins bilaterally with Canadian clients without registering as a dealer — provided it maintains its FINTRAC registration, holds a New York virtual currency license, extends no margin, and submits quarterly compliance reports to the OSC. The relief runs for four years and Blake's has described it as a "viable pathway" for other regulated US firms seeking Canadian access, though it is discretionary and fact-specific.
What this means: The SEC's investment contract safe harbor — if finalized — would be the single most consequential US crypto rule in years, creating a clear exit ramp from securities status for mature token networks. Canada is further ahead on stablecoin jurisdiction: the Bank of Canada now owns that space, CARF reporting is live, and the OSC is issuing firm-specific exemptions rather than waiting for legislation. Businesses operating in both markets should treat these developments as operational — not aspirational — compliance requirements.
Sources:
- CFTC Launches Crypto Market Structure Rulemaking as SEC Advances Its Own Digital Asset Framework — Baker Botts
- SEC Publishes The Long-Awaited Regulation Crypto Assets Proposed Rules — Benesch Law
- Trading in Stablecoins in Canada: New OSC Decision Offers Relief From Registration — Blakes
- Canada's New Crypto Rules 2026: What Investors Need to Know — GetPerk
- Federal Register: Regulation Crypto Assets