The Ontario Securities Commission has issued a notice stating that it will be holding a hearing against Bybit regarding the crypto exchange allegedly “flouting” Canadian securities law.
In a Monday notice from the Ontario Securities Commission, or OSC, the regulatory body alleged Bybit had “failed to comply with the registration and prospectus requirements under Ontario securities law” despite the OSC issuing an April 19 deadline for crypto exchanges operating in the province. As a result, the commission will be holding a hearing as early as July 15 to address the matter.
“A process is in place for crypto asset trading platforms to bring their operations into compliance with Ontario securities law,” said the OSC. “Entities such as Bybit, 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 regulatory body alleges that Bybit has not filed a prospectus with the OSC to legally operate in Canada, while the exchange provides instruments and contracts to investors which constitute securities and derivatives under Canadian securities law. Such trades would reportedly violate portions of the Ontario Securities Act and involve activity “that is contrary to the public interest.”
The proposed July hearing will address solutions, including that Bybit cease trading for a given period and “be prohibited from acquiring any securities permanently.” The OSC also proposed fining the exchange up to $1 million for each alleged violation of the securities law.
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In separate statements from the OSC in the last month, the commission made similar allegations against crypto exchange KuCoin and Polo Digital Assets, the parent company of Poloniex. In both cases, the OSC alleges the exchanges failed to contact the securities regulator by the April 19 deadline.
The Canadian province of Ontario has become home to many crypto firms pushing new boundaries in local regulations. In February, Toronto-based Purpose Investments launched the first Bitcoin exchange-traded fund, or ETF, in North America, a fund that has since grown to more than $880 million assets under management. Evolve Funds Group and Ninepoint Partners have also received regulatory approval for crypto ETFs.