Ontario Securities Commission penalizes Bybit and KuCoin for violating local laws

According to recent development, the crypto exchanges KuCoin and Bybit were hit with enforcement actions by the Ontario Securities Commission (OSC) after they broke local securities rules.

KuCoin and Bybit allegedly operated an unregistered cryptocurrency trading platform, the OSC claimed in a formal press release on Wednesday. The regulator also stated that the exchanges sold stocks directly to citizens of Ontario.

Ontario has strict laws for foreign exchanges

Foreign crypto-asset exchanges that want to operate in Ontario must follow the laws, according to a statement from OSC Director of Enforcement Jeff Kehoe. The findings revealed the recent crackdown should be a crystal-clear sign that the regulatory body will not put up with violations of Ontario securities law.

Bybit reportedly cooperated with law enforcement after the enforcement action, gave the relevant information, and is attempting to register the company, according to the Canadian watchdog. Bybit and the OSC also made a deal whereby Bybit will pay $2,468,910 in disgorgement plus an additional C$10,000 ($7,711). The report reveals that:

“While registration discussions are ongoing, Bybit confirms that it will not accept new accounts for residents, offer any new products to existing accounts held by Ontario investors, or engage in any marketing and promotional activities targeted at Ontario residents. If registration discussions fail, Bybit confirms that it will wind up its Ontario operations.”

The penalty on the exchange comes a few days after Bitfinex said it was laying off its workforce, following the similar decisions by Coinbase and Crypto.com.

The regulatory agency is known for its tough laws and tougher stance toward crypto exchanges. As TheCoinRise reported, in March, Binance told Ontario Securities Commission that it would cease its operations for the region’s investors. Moreover, in January this year, the digital asset trading platform Bitfinex announced that it would stop its services for residents due to regulatory pressure and suggested them remove funds before March.