KuCoin, a leading cryptocurrency exchange, will no longer operate in Canada after being permanently banned by the Ontario Securities Commission (OSC).
The ban is due to KuCoin’s inability to comply with securities laws in Ontario. In another development, the OSC has agreed to a settlement with Bybit Fintech Limited.
KuCoin Axed from Operating in Ontario
In March last year, the OSC ordered crypto-asset platforms offering derivatives or securities products in Ontario to contact the OSC or face stiff penalties. Additionally, after the initial announcement, the order came with a three-week ultimatum that the crypto service providers were to adhere to.
However, KuCoin and Bybit failed to do the needful, contact the regulatory body and continue their business in Ontario. The commission announced that the two entities were caught up with the long arm of the law and their respective enforcement actions.
It is worth noting that Bybit decided to cooperate with the commission and responded to every action against it. In addition, the exchange expressed its commitment to engage in further license discussions with OSC.
As a result, Bybit and OSC agreed on a settlement with the exchange to pay 2,468,910 Canadian dollars (CAD). Moreover, Bybit will pay another CAD 10,000 to cover the expense of the commission’s investigation.
Meanwhile, the commission decided to ban KuCoin after refusing to cooperate permanently.
Bybit Reacts to the Enforced Action
Bybit has announced that it will not be doing anything as long as the registration discussion between it and the commission is in progress. As a result, the exchange has halted account opening for Ontario residents and will not be offering any new products to existing accounts.
It also revealed that no further marketing or promotion events would be carried out in Ontario till the outcome of the registration discussion is concluded.
However, Bybit revealed that existing retail investors in Ontario would have their assets dropped in some restricted products under the exchange offer. Furthermore, funds and assets still in the retail investors’ accounts can be withdrawn or used for unrestricted products.
According to Bybit, if discussion with the regulatory body hits the rocks, the commission will force the exchange to withdraw its services in Ontario.
It is worth noting that both Bybit and KuCoin were accused of running unregistered digital assets trading on their platforms. While not registered, they offer Ontario residents crypto derivates without official approval.
Regulators worldwide are tightening their grip on the operations of crypto service providers even before the current market glut. It is safe to say some crypto exchanges run afoul of the law due to their inability to adhere to regulatory guidelines. Regulators often cite consumer protection as the main reason for their strict guidelines.
For all its experience in the crypto space, KuCoin has lost a significant market in Canada after the recent ban. Although the exchange still has a global market to provide its services to, the loss of the Ontario license is a big hit to its expansion.