Canadian regulator takes enforcement actions against Bybit and Kucoin

“Bybit responded to the OSC’s enforcement action, maintained an open dialogue, provided requested information, and committed to engaging in registration discussions,” said the OSC.

The Ontario Securities Commission, or OSC, issued financial penalties against Bybit and Kucoin, claiming violations of securities laws and operating unregistered crypto asset trading platforms.

In a Wednesday announcement, the Ontario regulator said it had obtained orders fining Kucoin more than $1.6 million and banning the exchange from participating in the province’s capital markets. In a separate decision, the OSC announced that Bybit had disgorged roughly $2.4 million and paid the regulator $7,724 as part of the costs of its investigation. Both firms allegedly failed to comply with Ontario securities laws, but only Bybit “responded to the OSC’s enforcement action, maintained an open dialogue, provided requested information, and committed to engaging in registration discussions.”

“Foreign crypto asset trading platforms that want to operate in Ontario must play by the rules or face enforcement action,” said OSC enforcement director Jeff Kehoe.

OSC holds global crypto asset trading platforms accountable: https://t.co/TPC9mtvTRE pic.twitter.com/Nl9pGP0U3j

— OSC News (@OSC_News) June 22, 2022

The move by the regulatory body was the latest in a series of warnings and legal actions taken against crypto exchanges offering services to Ontario residents. In March 2021, the OSC issued a deadline for crypto firms operating in the province to register by April. According to the regulator, Bybit will “wind up its Ontario operations” if the firm is unable to register.

Related: Binance tells regulators it will cease operations in Ontario… for real this time

Both Bybit and Kucoin allegedly did not comply with the securities regulator, prompting hearings and other enforcement actions starting in June 2021. The OSC had already initiated regulatory actions against crypto exchanges Poloniex and OKEx for similar violations of securities laws.

As of June 1, eight companies are listed as registered crypto asset trading platforms in Ontario, including Fidelity Digital Assets, Bitvo, and Bitbuy.