Crypto Exchange Poloniex Accused of Breaking Ontario Securities Law

Fazzaco learned that cryptocurrency exchange Poloniex has been charged of breaching Ontario securities law by the Ontario Securities Commission (OSC).

More specifically, the Canadian regulator alleges that Poloniex, which operates under the name of Polo Digital Assets, Ltd., is subject to Ontario securities law as their digital assets offerings are available to Ontario’s residents. OSC believed that crypto asset products offered on the platform are securities and derivatives.

Through the platform, people have been actively conducting deposit and trade operations in cryptocurrencies that fell under the securities and derivatives category granted by the OSC. In addition, Poloniex has nonetheless failed to comply with the registration and prospectus requirements under Ontario securities law. 

The Canadian regulator also pointed out that the crypto exchange has never been registered with the OSC to offer trading services in Ontario. Furthermore, the Commission accuses the crypto firm to not specify Canada as one of its “Restricted Territories.”

OSC requested that Poloniex cease its business “in any securities or derivatives.” The regulator also orders that the crypto exchange be prohibited from becoming or acting as “a registrant, as an investment fund manager or as a promoter permanently or for such period as is specified by the Commission.”

Furthermore, the company is subject to pay an administrative penalty of not more than 1 million CAD ($825,650) for each failure to comply with Ontario securities law, as well as paying for the costs of the OSC’s investigation and the hearing.