Financial penalties have been brought against the two crypto exchanges on charges of securities law violation and unregistered operations.
OSC’s Non-Compliance Crack Down
The penalties were issued by the Ontario Securities Commission (OSC), which accused the two exchanges of violating securities laws and operating unregistered crypto trading platforms. The enforcement action indicates that the regulator is quite serious about moving against non-compliant asset-trading platforms. The OSC had even rebuked leading crypto exchange Binance when the latter announced to its Ontario userbase that it would not be ceasing its operations in the region.
Bybit And KuCoin Failed To Register
The deadline for registration for crypto exchanges was April 19, 2021, which both the exchanges failed to meet. Once the OSC’s investigation uncovered the non-compliance, it then led to hearings and other enforcement actions since June 2021 resulting in million dollar penalties for both the exchanges. However there is a general difference in the attitudes of the exchanges. While Bybit has been quite accommodating with the OSC’s investigation and demands, KuCoin has been accused of being just as uncooperative.
Bybit Cooperates With Regulator
Bybit had entered into constructive dialogue with the OSC, which allowed them to agree on a settlement amount. As part of the agreement, Bybit paid a C$2.5 million (US$1.9 million) fine, with an additional C$7724 to the OSC for investigation-related costs. In a statement, the OSC revealed that even though both firms had failed to comply with the state’s securities laws, only Bybit did not contend with OSC’s enforcement action, communicated freely, provided the necessary information, and agreed to go forward with registration processes. The crypto exchange has also conceded not to accept any new Ontario-based customers or offer its services in the region till the registration process is completed.
KuCoin Banned Permanently
On the other hand, KuCoin has displayed an uncooperative attitude towards the regulator, earning them the ire of the regulator. A panel of the Capital Markets Tribunal has ordered substantial monetary sanctions and a permanent market ban against the Seychelles-based crypto exchange. The fines levied against them amount to around C$2 million (US$1.5 million), with an additional C$100,000 (US$77,000) in investigation-related costs.
OSC Director of Enforcement Jeff Kehoe commented,
“Foreign crypto asset trading platforms that want to operate in Ontario must play by the rules or face enforcement action. The outcomes announced today should serve as a clear indication that we refuse to tolerate non-compliance with Ontario securities law.”
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.