Canadian Regulator Penalizes KuCoin, Bybit for Securities Law Violations
The Ontario Securities Commission (OSC) issued financial penalties against KuCoin and Bybit, alleging violation of securities laws and operating unregistered crypto exchanges. The OSC said foreign crypto trading platforms must play by the rules, or face enforcement actions.
The OSC has hit two foreign cryptocurrency trading platforms with enforcement actions after finding they failed to comply with securities laws there. KuCoin has been banned from operating in the Ontario province, while Bybit agreed to pay a fine as it cooperates with the authority to register appropriately.
In a Wednesday announcement, the Ontario regulator said it had obtained orders banning KuCoin from participating in the province’s capital markets and fining the exchange for more than $1.6 million. The OSC also announced that, as part of a settlement agreement, Bybit disgorged roughly $2.4 million and paid the regulator $7,724 as part of the costs of its investigation. Both firms allegedly failed to comply with Ontario securities laws, but only Bybit “responded to the OSC’s enforcement action, maintained an open dialogue, provided requested information, and committed to engaging in registration discussions.”
“Foreign crypto asset trading platforms that want to operate in Ontario must play by the rules or face enforcement action,” said OSC Director of Enforcement Jeff Kehoe.
The move by the regulatory body was the latest in a series of warnings and legal actions taken against crypto exchanges offering services to Ontario residents. In March 2021, the OSC issued a deadline for crypto firms operating in the province to register in compliance with securities law by April. According to the regulator, Bybit will “wind up its Ontario operations” if the firm is unable to register.
Both Kucoin and Bybit allegedly failed to comply with the securities regulator, prompting hearings and other enforcement actions beginning in June 2021. The OSC has initiated regulatory actions against cryptocurrency exchanges Poloniex and OKX (formerly named OKEx) for similar violations of securities laws.
As of June 1, eight companies were listed as Ontario-registered cryptocurrency trading platforms, including Bitvo, Bitbuy and Fidelity Digital Assets.