The Ontario Securities Commission (OSC) has accused cryptocurrency exchange Poloniex of flouting local laws. The regulator intends to “hold the company accountable and send a message that crypto-asset trading platforms that violate Ontario securities laws are awaiting enforcement action.”
OSC advises that Poloniex operates an Ontario-based cryptocurrency exchange and offers securities and derivatives to the province’s residents without complying with filing and prospectus requirements.
“Investors do not own or control cryptocurrency assets that are deposited or exchanged at Poloniex. Instead, they see the balance of cryptocurrency assets displayed in their account on the platform. To get the assets displayed on the balance sheet, the investor must send a request and rely on Poloniex, ”the message says.
Poloniex, although it claims to serve trading in cryptocurrency assets, in practice offers investors instruments or contracts using such assets and therefore violates securities legislation, the regulator adds. OSC also notes that it previously recommended that crypto exchanges contact it to discuss the legal compliance of the services provided, but Poloniex did not.
Now the authorities want to collect CAD 1 million (US $ 830,000) from the company. The first hearing in the case is scheduled for June 18.
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