Kucoin outlawed in Ontario, after avoiding Canada’s Securities Commission

Published by
Nonhlanhla P Dube

The Ontario Securities Commission (OSC) stated yesterday that it has barred cryptocurrency exchange Kucoin from operating in the province and fined digital asset platform Bybit R30.7 million(CA$2.5 million).

The OSC demanded in March 2021 that any crypto trading platforms offering derivatives or securities trades in the province contact the regulator by April 19 2021 or risk enforcement action.

Kucoin and Bybit did not alert the OSC in time and continued to operate, forcing the commission to investigate.

However, Kucoin refused to cooperate and repeatedly refused to provide the OSC with the necessary information. On the other hand, it looks that Bybit was more than willing to assist.

“Unlike KuCoin, Bybit responded to the OSC’s enforcement action, maintained an open dialogue, provided requested information, and committed to engaging in registration discussions,” the OSC said on Wednesday.

The OSC is enforcing cryptocurrency exchange fines

According to regulatory documents on Tuesday, Kucoin’s punishment for refusing to provide any data for the OSC inquiry is a permanent prohibition on trading within the province of Ontario and an R24.5 million (CAD$2 million) fine.

Bybit is still permitted to operate in Ontario, but as part of yesterday’s settlement, it was fined R30.7 million (CAD $2.5 million) for violating laws in 2021.

Bybit also confirmed as part of their settlement with the OSC:

New accounts for residents of Ontario will not be accepted.

No new products will be provided to existing investors or their accounts.

It will not engage in any marketing or promotional efforts aimed at residents of Ontario.

Any residual assets in Ontario retail investor accounts may be removed from the Bybit platform or used for non-restricted items. If all of this fails, Bybit has stated that it will “terminate its Ontario operations.”

“The decisions announced today should serve as a clear indicator that we refuse to tolerate non-compliance with Ontario securities law,” said Jeff Hehoe, director of OSC enforcement.

According to the commission, cryptocurrency companies that use “gambling-style” marketing and promotions may violate securities law.

So far, the OSC has registered eight businesses.

Canada aims to attract cryptocurrency investment

Protos stated in February that Canadian Prime Minister Justin Trudeau was under pressure from the country’s Conservative Party to establish a national cryptocurrency framework in order to ‘woo investors.’

MPs have urged the country to take cryptocurrency seriously by proposing new legislation, such as the Encouraging the Growth of the Cryptoasset Sector Act, or risk losing billions of dollars in investment.

The framework would, in part, “focus on lowering barriers to entry into the crypto asset sector while protecting those working in the sector and minimizing the administrative burden.”

Nonhlanhla P Dube

Nonhlanhla P Dube is a senior news reporter at Rateweb. Nonhlanhla is a student of International Relations at the University of South Africa. She reports primarily on personal finance and economics. You can contact her directly by email at nonhlanhla@rateweb.co.za

Published by
Nonhlanhla P Dube