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A top Canadian financial regulator has slapped two crypto exchanges, Bybit and KuCoin, with enforcement actions for failing to comply with securities laws in the Canadian province of Ontario.
The Ontario Securities Commission (OSC) determined that both exchanges were operating noncompliant platforms that allowed Ontario residents to trade unregistered securities.
“Foreign crypto asset trading platforms that want to operate in Ontario must play by the rules or face enforcement action,” Jeff Kehoe, director of enforcement at the OSC, said in a press statement. “The outcomes announced today should serve as a clear indication that we refuse to tolerate non-compliance with Ontario securities law.”
Bybit, which recently confirmed it was laying off employees, cooperated with the investigation and reached a settlement agreement with the regulator. As part of the agreement, Bybit paid a nearly C$2.5 million ($1.9 million) fine to the OSC and agreed to work with the agency to properly register. In the meantime, Bybit won't accept new accounts for Ontario-based customers or market its services in the province.
Unlike Bybit, KuCoin is accused of being uncooperative with the OSC’s investigation. As a result, the Seychelles-based exchange has been permanently banned from participating in Ontario’s capital markets. The OSC also hit the exchange with a C$2 million ($1.5 million) fine, as well as nearly C$100,000 ($77,000) in investigation-related costs.
The penalties come over a year after the OSC told exchanges operating in Ontario that they “must contact the OSC or face enforcement action.”
According to the OSC, neither Bybit nor KuCoin contacted or registered with the agency by the April 19, 2021 deadline.