The Ontario Securities Commission (OSC) announced yesterday that it’s banning crypto exchange Kucoin from operating in Ontario and slapping digital asset platform Bybit with a CA$2.5 million ($1.9 million) fine.
In March 2021, the OSC demanded that any crypto trading platforms offering trades in derivatives or securities within the province must contact the regulator by April 19 2021 or face enforcement actions.
Kucoin and Bybit failed to contact the OSC in time and continued their operations, prompting an inquiry from the commission.
However, Kucoin didn’t play ball and continually refused to supply the OSC with the required information. On the other hand, it appears Bybit was more than happy to help.
“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 announced on Wednesday.
OSC dealing out crypto exchange fines
Kucoin’s punishment for refusing to submit any information for the OSC inquiry is a permanent ban on trading within the Ontario province and a CA$2 million ($1.5 million) fine, according to regulatory filings on Tuesday.
Bybit is still allowed to operate in Ontario, but for flouting regulations in 2021, it’s been fined CA$2.5 million as part of yesterday’s settlement.
As part of its settlement with the OSC, Bybit also confirmed that:
- New accounts for Ontario residents will not be accepted.
- Existing investors and their accounts will not be offered any new products.
- It will not engage in any marketing and promotional activities targeted at Ontario residents.
Any remaining assets in Ontario retail investor accounts may be used for non-restricted products or withdrawn from the Bybit platform. If all this fails, Bybit has said it will “wind up its Ontario operations.”
Director of OSC enforcement, Jeff Hehoe, said: “The outcomes announced today should serve as a clear indication that we refuse to tolerate non-compliance with Ontario securities law.”
Cryptocurrency companies using “gambling-style” marketing and promotions could also break securities law according to the commission.
So far eight companies have registered with the OSC.
Canada wants to woo crypto investors
In February, Protos reported how Canadian prime minister Justin Trudeau was under pressure from the country’s Conservative Party to adopt a national crypto framework in order to ‘woo investors.’
MPs called for the country to take crypto seriously by introducing new legislation — like the Encouraging the Growth of the Cryptoasset Sector Act — or they say Canada risks missing out on billions of dollars in investment.
Part of the framework would “focus on lowering barriers to entry into the crypto asset sector while protecting those working in the sector and minimizing the administrative burden.”