Ontario Securities Commission Snuffs out Crypto Exchanges, Poloniex Targeted for Flouting Compliance

The Ontario Securities Commission (OSC) published documentation on Tuesday that claims the Seychelles-based crypto exchange, Poloniex has failed to contact the OSC in order to start compliance discussions. Poloniex meets the OSC’s jurisdiction because the trading platform operates trading accounts for Ontario residents, the OSC’s breach and conduct report notes.

OSC Says Poloniex Failed to Communicate With the Ontario Regulator

According to Ontario’s top financial regulator, the Ontario Securities Commission (OSC) sent out communications to crypto-asset trading platforms that offer digital currency services to citizens of Ontario.

On March 29, the letter said “they must bring their operations into compliance with Ontario securities law or face potential regulatory action.” The notice also told the exchanges that the firms needed to contact the OSC by April 19, 2021 “to start compliance discussions.”

However, the OSC’s latest report highlights that the Seychelles-based crypto exchange, Poloniex allegedly failed to contact the regulator. The OSC stressed that a process has been created for virtual asset service providers to follow.

“A process is in place for crypto asset trading platforms to bring their operations into compliance with Ontario securities law. Entities such as Poloniex, which flout this compliance process, expose Ontario investors to unacceptable risks and create an uneven playing field within the crypto asset trading platform sector,” the report adds.

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No Other Digital Currency Exchanges Mentioned, OSC Seeks Penalties Against Poloniex

The report does not mention any other digital currency exchanges that have complied or others that may have flouted the warnings. The litigation and enforcement staff of the OSC division wants Poloniex to “cease trading in any securities or derivatives permanently or for such period as is specified by the Commission.”

Moreover, enforcement wants Poloniex to be barred from “acquiring any securities permanently” or until the OSC is satisfied. The regulator’s enforcement office also seeks to force Poloniex to:

Pay an administrative penalty of not more than $1 million for each failure to comply with Ontario securities law.

The order sought is dated May 25, 2021, by the OSC’s Litigation Counsel Charlie Pettypiece. The author notes that the Poloniex should also pay for investigation costs and all the orders proposed are “appropriate in the public interest.”

What do you think about the Ontario Securities Commission’s recent report on Poloniex and the orders sought? Let us know what you think about this subject in the comments section below.