The Ontario Securities Commission has taken enforcement action against cryptocurrency exchanges Bybit and KuCoin, fining them for failing to comply with securities laws.
According to the Ontario Securities Commission (OSC), Bybit and KuCoin failed to comply with local regulators by allowing Ontario residents to trade unregistered securities. The Bybit platform maintained a dialogue with the regulator, therefore, a settlement agreement was concluded between OSC and Bybit Fintech Limited, registered in the British Virgin Islands. The exchange paid OSC a fine of 2.5 million Canadian dollars ($1.9 million), as well as 10,000 Canadian dollars (about $7,700) to cover the costs of the OSC investigation.
Bybit has also made a commitment to bring its operations in line with the regulator’s requirements. During exchange registration discussions, Bybit will not create new Ontario customer accounts, provide services to Ontario residents, or engage in marketing or promotional activities directed at Ontario citizens.
If the exchange does not receive OSC approval to operate in the province, it must cease operations in that territory. Ontario users already registered with Bybit must close their positions in certain products. This applies to trading with leverage and margin trading. Any assets remaining in Ontario retail investor accounts can be withdrawn from the Bybit platform.
Unlike Bybit, KuCoin has not partnered with the OSC, the regulator says. Companies associated with the KuCoin cryptocurrency exchange – Mek Global Limited, registered in the Seychelles, and PhoenixFin Pte Ltd, registered in Singapore – are subject to a permanent ban on doing business in Ontario. In addition, KuCoin is required to pay an administrative fine of 2 million Canadian dollars ($1.5 million), as well as 96,550 Canadian dollars (about $74,500) as expenses related to the investigation.
On March 29, 2021, OSC warned platforms offering derivatives and securities trading in Ontario to begin the registration process by April 19, 2021. Despite this warning, Bybit and KuCoin did not contact OSC by the deadline and continued to operate in Ontario, so the Commission was forced to take enforcement action against these marketplaces.
“Foreign cryptoasset trading platforms wishing to operate in Ontario must comply with the regulations. Otherwise, they will have to face coercive measures. We have no intention of condoning violations of securities laws,” said OSC Compliance Officer Jeff Kehoe.
Recall that in May last year, the OSC filed similar accusations against the Poloniex cryptocurrency exchange. In 2020, the cryptocurrency derivatives exchange BitMEX was also forced to stop working with traders from Ontario in order to comply with the requirements of the regulator.
Source: Bits
I’m James Harper, a highly experienced and accomplished news writer for World Stock Market. I have been writing in the Politics section of the website for over five years, providing readers with up-to-date and insightful information about current events in politics. My work is widely read and respected by many industry professionals as well as laymen.
