OSC steps up crypto enforcement

The Ontario Securities Commission (OSC) is ramping up its fight against unregistered crypto-trading platforms with charges against two more offshore firms alleged to have ignored its warning to register.

The OSC will hold a hearing on July 6 into allegations against two firms — Mek Global Ltd., which is based in the Seychelles, and Singapore-based PhoenixFin Pte. Ltd. — which the regulator alleged are operating an unregistered trading platform, known as KuCoin.

In its allegations against the firms, the OSC said that investors in Ontario have opened accounts on the platform and have used it to trade in cryptoasset products that are considered securities and derivatives without being registered.

The allegations have not been proven.

The allegations are the second case brought by the OSC since it warned crypto firms in March that they must contact regulators by April 19 or they could face regulatory enforcement action. The regulator brought its first case last month against another Seychelles-based company.

“Despite this warning, KuCoin did not contact the OSC,” the regulator said in a release.

“Entities such as KuCoin, which flout this compliance process, expose Ontario investors to unacceptable risks and create an uneven playing field within the cryptoasset trading platform sector,” the allegations said.

The OSC stressed that it will continue to take action against crypto-trading platforms that don’t comply with Ontario securities law, noting that it is “in contact with international securities regulators to exchange information to support enforcement action.”

James Langton

James is a senior reporter for Advisor.ca and its sister publication, Investment Executive. He has been reporting on regulation, securities law, industry news and more since 1994.