Cryptocurrency News

Canadian regulators accused crypto exchange of breaking securities law

Canadian securities regulators have initiated a regulatory action against Poloniex, the leading global cryptocurrency exchange.

On Tuesday, the Ontario Securities Commission Published A statement of allegations against Polo Digital Assets, also known as Poloniex, alleged that the firm failed to comply with Ontario securities laws.

According to the statement, Polonics has never been registered with the agency, while Canadians have been encouraged to use its platform and allow Ontario residents to trade crypto derivatives and securities. The OSC wrote, “Poloniex has never filed a prospectus with the commission or obtained an exemption from the prospectus requirement.”

As Polonics is incorporated into the Republic of Seychelles, the Seychelles Financial Services Authority is assisting Canadian regulators in this matter, O.S.C. Noted.

Nearly two months after OSC, new action has taken place Notified Ontario-operating crypto exchanges should they comply with local securities laws or face potential regulatory action. Cryptocurrency firms were asked to contact OSC by April 19, 2021 to discuss how to bring their operations as a dealer or marketplace into compliance.

The regulator stated, “Despite this warning, Polonics did not contact the Commission until April 19, 2021 or at any time to initiate a compliance discussion.”

As such, OSC enforcement staff requested that the Commission should order Poloniex to cease trading in any securities or derivatives permanently or for a period specified by the regulator. Employees also requested Poloniex to acquire any securities and prevent them from becoming a registrar as investment fund managers.

The statement said Polonics would have to pay an administrative penalty of up to 1 million Canadian dollars for each failure to comply with Ontario securities law.

Poloniex did not immediately respond to Cointegraph’s request for comment.

“To date, there is only one crypto asset dealer registered with Canada’s securities regulators,” OSC said. To date, there are more than 70 platforms that have initiated compliance discussions with Canadian securities regulators, the authority noted.