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Canadian regulator fines KuCoin and Bybit for violating securities laws

The Ontario Securities Commission (OSC) has slammed cryptocurrency exchanges KuCoin and Bybit with enforcement actions as both companies violated local securities laws.

Bybit stops accepting new users from Ontario

According to an official press release on Wednesday (June 22, 2022), the OSC said that KuCoin and Bybit operated an unregistered crypto trading platform. The regulator added that exchanges sold securities to Ontario residents without going through the proper channel.

A statement from OSC Director of Enforcement Jeff Kehoe said:

“Foreign crypto asset trading platforms wishing to operate in Ontario must comply with the rules or face enforcement action. The results announced today should serve as a clear signal that we do not tolerate non-compliance with Ontario’s securities laws.”

The Canadian watchdog said Bybit worked with authorities following the enforcement action, providing the necessary information and working on registering the company. Bybit also reached an agreement with the OSC to pay a disgorgement of $2,468,910, with an additional C$10,000 ($7,711).

Meanwhile, the crypto firm is not accepting new accounts for Ontario residents, offering new checking account products for Ontario investors, or conducting marketing activities aimed at residents of the province.

Bybit’s fine comes days after the company announced it would be reducing its workforce after similar measures were taken by Coinbase, BlockFi and CryptoCom. A spokesman for the crypto exchange said:

“As the bear market companies worldwide were affected, many of which required extensive cost-cutting measures. Bybit is no exception, apart from taking extreme steps to keep our workforce as long as possible during this crisis.”

KuCoin receives permanent ban

Seychelles-based KuCoin, on the other hand, did not cooperate with investigations, according to the OSC. Consequently, the cryptocurrency exchange is permanently banned from participating in Ontario’s capital markets.

In addition to the ban, KuCoin was also fined C$2 million in administrative fines and an additional $96,550 for OSC investigation costs.

The Canadian regulator said back in March 2021 that crypto exchanges operating in Ontario must contact the Securities and Exchange Commission or face enforcement action, with a deadline of April 19, 2021.

Later in May 2021, the OSC charged Poloniex with breaking the law and fined the exchange CAD$1 million.

Featured image courtesy of The Globe and Mail

Source: Crypto News Deutsch

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