The Ontario Securities Commission (OSC) has come down hard on the crypto exchange business, charging Poloniex with breaking securities regulations, according to the Toronto Star.
Poloniex is a Seychelles-based crypto exchange. Formerly owned by stablecoin provider Circle, the exchange was spun out into an independent entity in 2019. Notably, Justin Sun, the founder of Tron, joined a consortium of investors who reacquired the exchange for $100 million in November 2019.
Yesterday, the OSC alleged Poloniex was trading securities without registration, failing to comply with disclosure requirements, and engaging in activity that was reportedly “contrary” to the public interest.
The OSC’s decision has garnered support from other groups in Canada, including investor-rights advocacy group Fair Canada.
“There are a lot of investors who really aren’t taking the steps to truly understand who they’re dealing with and what they’re investing in,” reportedly said Jean-Paul Bureau, executive director of the advocacy group.
The OSC and crypto
Two months ago, the securities regulator notified cryptocurrency trading platforms that they had to bring their operations into compliance with Ontario legislation.
“Unregistered crypto asset trading platforms expose Ontario investors to significant risks, including potential loss, theft, and misuse of their assets,” said Grant Vingoe, chair and CEO ad the OSC, adding, “The recent explosion of unregistered platforms has magnified these risks.”
However, it hasn’t all been doom and gloom for the crypto industry in Canada.
In February of this year, the OSC approved the first Bitcoin-exchange traded fund (ETF) in North America—The Purpose Bitcoin ETF. It runs on the Toronto Stock Exchange and allows everyday investors to incorporate stock in Bitcoin into their investment portfolios.
Since then, eight crypto ETFs have flocked to Canada, including four Ethereum ETFs.