Canada Cracks Down on Crypto Firms Amid Prop Trading Growth

Canada's financial regulator has vowed to continue cracking down on cryptocurrency-related businesses after shutting down 47 firms in 2026. The move is seen as part of a broader trend in which regulators are increasingly scrutinizing prop trading models, which have become popular among traders.

In this context, Web3-native prop trading platforms like Upscale have emerged as an alternative to traditional self-funded models. These platforms offer traders access to scalable capital and enforce discipline through algorithmic risk logic and deterministic rules.

According to Denis Vasin, the Lead Developer of Upscale, the key advantage of prop trading is that it allows traders to focus on their edge without being overwhelmed by emotional decision-making. By allocating capital based on performance, prop models can help traders avoid common pitfalls such as excessive leverage and inconsistent sizing.