After Poloniex, the Ontario Securities Commission (OSC) went after KuCoin, alleging that the cryptocurrency exchange had violated the Canadian state’s securities law.
In a press release published earlier this week, the state regulator issued the statement of allegation against Seychelles-incorporated Mek Global Limited and PhoenixFin Pte. Ltd., which is incorporated in Singapore. Both the firms operate the digital asset platform, KuCoin.
According to the regulator, KuCoin is an unregistered crypto asset trading platform and illegally offers citizens of Ontario trading services with ‘securities and derivatives’.
“Staff 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,” the Canadian state regulator stated.
Initially, the OSC issued a notice to all crypto trading platforms operating in the state to comply with the securities laws and get in touch with the regulator to discuss how to bring their operations into compliance.
“Platforms must contact OSC staff by April 19, 2021, to discuss how to bring their operations as a dealer or marketplace into compliance,” the regulator stated earlier.
However, KuCoin did not respond to the call.
Targeting Crypto Exchanges
A similar warning had been issued against Poloniex, another Seychelles-registered cryptocurrency exchange, that had never been registered with the OSC or specified Canada as one of its ‘Restricted Territories’.
Though Kucoin offers crypto derivatives trading, it is not clear which digital currencies the Canadian regulator is categorizing as securities.
Meanwhile, the state regulator has been friendly towards cryptocurrency exchange-traded funds (ETFs) and approved several in recent months for listing on the regular stock exchanges.
“Unregistered crypto asset trading platforms expose Ontario investors to significant risks, including potential loss, theft and misuse of their assets. The recent explosion of unregistered platforms has magnified these risks,” said Grant Vingoe, Chairman and CEO at the OSC.