Bybit got hit with a $1.9 million penalty, whereas KuCoin got a $1.5 million fine and received a lifetime ban from engaging in Ontario's capital markets.
The Canadian financial regulator dubbed the Ontario Securities Commission (OSC) has recently penalized two crypto exchanges KuCoin and Bybit. The regulator implied that both exchanges weren't able to comply with securities laws.
According to the official announcement released on June 22, Bybit and KuCoin also operated unregistered crypto-asset trading platforms, which paved the way for citizens living in Ontario to trade securities without a prospectus.
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In fact, Bybit, founded back in 2018 and led by CEO Ben Zhou, has managed to dodge a bullet as it cooperated with the OSC and took great responsibility in reaching a settlement agreement. The official report indicated that the exchange paid around C$2.5M, estimated at $1.9M, fine, which “represents a legally enforceable commitment by Bybit to the OSC.”
Furthermore, Bybit gave word that it wouldn't "accept new accounts for Ontario residents, offer any new products to existing accounts held by Ontario investors," as well as take part "in any marketing and promotional activities targeted at Ontario residents." The OSC also mentioned that Bybit will close down its operations in the province if it doesn't succeed in registering with the agency.
On the other hand, Seychelles-based KuCoin, launched in 2017, wasn't so keen on communicating with the OSC, as the Canadian regulator banned the exchange from participating in Ontario’s capital markets. On top of that, the OSC slapped KuCoin and issued an administrative penalty of C$2M, worth roughly $1.5M.
The director of enforcement at the OSC Jeff Kehoe mentioned that such foreign trading platforms must play it by the book if they want to avoid any severe penalties. Kehoe added that the settlement agreement shows that OSC will not tolerate companies that don’t comply with the regulator.
“The OSC will continue to take action against non-compliant crypto-asset trading platforms and are in contact with international securities regulators to exchange information to support enforcement action.”
Currently, the list of legally registered crypto-asset trading platforms includes Bitbuy, Bitvo, Coinberry, Fidelity Digital Assets, Netcoins, CoinSmart, VirgoCX, and Weathsimple.