Ontario regulator accuses KuCoin of securities-law violations

The Ontario Securities Commission (OSC) accused entities tied to the cryptocurrency exchange KuCoin of breaching securities laws.

According to the release, the matter concerns the Seychelles-based Mek Global (the name of KuCoin) and the Singapore-based firm PhoenixFin Pte. The latter is the owner of the exchange’s website.

The OSC noted that KuCoin operates an unregistered platform and “calls on Ontario residents to trade crypto-asset products that are securities and derivative financial instruments”.

On March 29, the regulator announced that companies trading digital assets must register as investment dealers. By April 19 they were required to contact the OSC to avert potential enforcement action.

According to the regulator, more than 70 platforms have initiated discussions on bringing their activities into line with regulatory requirements. KuCoin was the exception.

Mek Global and PhoenixFin face fines of up to CAD 1 million ($827,000) “for each breach of Ontario securities law”. KuCoin could be temporarily or permanently barred from operating.

Earlier in May the OSC filed a lawsuit against the Bitcoin exchange Poloniex, accusing it of unregistered trading of stocks and derivatives.

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