Currently, Smith finds herself at Figment, a Canadian staking company catering to institutional clients. Staking crypto assets allows holders to earn rewards for validating transactions and securing the network. While Smith is still based in New York, the ability to use her Canadian experience is not only a comforting reminder of her roots but also provides a broader perspective on the global cryptocurrency landscape. This perspective allows her to bridge insights and practices from both markets and contribute to more effective legal guidance in the ever-evolving crypto industry.
In Canada, regulators have introduced frameworks for handling governance tokens, stablecoins, and lending protocols, with the intent of pushing platforms toward compliance. It’s possible that the relatively prescriptive approach, she suggests, can be traced back to early and impactful incidents like the collapse of crypto exchange QuadrigaCX in 2019, a high-profile fraudulent scandal in Canada that caused many investors to lose access to their crypto assets on the exchange. Largely unregulated and without proper oversight, QuadrigaCX gave its founder unchecked control over the company’s operations and finances, which ultimately led to its downfall.
“The fallout from QuadrigaCX,” she notes, “really set the tone for Canadian regulators, heightened their awareness of the risks in the crypto space and prompted a more cautious, proactive stance moving forward.
“Providing this regulatory clarity is essential for fostering innovation,” she adds. “However, overly rigid regulations that don’t consider the nuances or the novel aspects of this technology can end up stifling the very innovation they’re designed to support.” She sees a balanced approach as critical – one that promotes growth and adaptability while still ensuring strong protections for investors and maintaining market integrity.
“The best way for regulators to achieve their goal of protecting investors without curbing innovation is through collaboration with market participants.” By developing standards and best practices for both centralized and decentralized trading platforms that account for the technology’s complexities, Canada can be a leader in crypto innovation.
However, the digital economy extends far beyond Canada, as it is fundamentally about transacting on a global scale. Crypto companies face the challenge of navigating a multifaceted regulatory landscape that varies widely across jurisdictions.