Ontario Securities Commission Probing Unauthorized Cryptocurrency Trading Platforms

ICO News, News, Regulation | April 9, 2018 By:

The Ontario Securities Commission (OSC) in Canada is investigating several cryptocurrency trading platforms after receiving a number of complaints.

The OSC said Friday that cryptocurrency exchanges, where the digital tokens are bought and sold, may fall afoul of securities laws. The regulator said that any platform that offers this type of trading must determine whether it is a marketplace. Under Ontario law, marketplaces are required to comply with the rules governing exchanges or alternative trading systems.

“We are aware of several cryptocurrency trading platforms operating in Ontario and are gathering information about their activities,” said Kristen Rose, spokesperson for the commission. “To date, none have been recognized as an exchange, or exempted from recognition. If an exchange is doing business in a jurisdiction of Canada, it must apply to that jurisdiction’s securities regulatory authority for recognition or an exemption from recognition.”

The move by the Ontario regulator comes amid the rise of initial coin offerings (ICO) in Canada. In August 2017, the Canadian Securities Administrators (CSA) issued a notice that said many ICOs appeared to involve the sale of securities, and should be subject to Canada’s securities laws and scrutiny if they are sold to Canadian investors or by anyone conducting business in the country.

The OSC recently stated that cryptocurrency and blockchain related developments will be one of its key areas of focus for the next fiscal year. It intends to advance key investor protection measures, including publishing reforms that address the best interests of the client and defining actions on embedded commissions.