After receiving multiple complaints about crypto trading platforms, the Ontario Securities Commission (OSC) is examining these businesses to decide on their legality, as suggested by a report.
Crypto-Exchanges May not Be Compliant
The buying and selling of digital tokens on cryptocurrency exchanges may conflict with the security laws, according to Ontario’s regulatory body.
A spokesperson of the commission, Kristen Rose, informed news agencies that they are aware of several cryptocurrency trading platforms operating in Ontario, and are actively gathering information about their business. However, the statements confirm that absolutely none of them are recognized legally as an exchange, or in some cases, have been exempted from recognition.
If a cryptocurrency exchange is carrying out business in the sovereignty of Canada, it is mandatory for that exchange to register and abide by that jurisdiction’s securities commision for recognition. Rose iterated the following:
“Exchange marketplaces are required to adhere to the governing exchanges or other trading systems. Since crypto platforms offer trading options, they are classified as a marketplace.”
ICOs and Exchanges Face the Heat
Recently, there’s been a rise in the number of ICOs launching new tokens, and similarly, a significant increase in the exchanges to trade those digital tokens. The simultaneous growth in unregulated businesses has prompted the regulator to take note of the crypto trading industry, and possibly introduce specific regulations.
Regulations would also help future businesses in staying complaint, as the allure of digital currencies attracts a lot of startups and individuals to this market.
In particular, the regulators are working out the business models of exchanges and ICOs, as these unregulated avenues give rise to scams resulting in massive investor losses.
ICOs and Exchanges also on U.S SEC’s Radar
The Securities and Exchange Commission (SEC), in the U.S, has already been investigating a number of cryptocurrency exchanges and ICOs and has already cracked down on several.
Earlier in February 2018 BitFunder, which was operating as an unregistered securities exchange, was charged with fraud by the SEC. The regulator notes that registration is necessary for any firm that wishes to engage in any activity related to the national securities exchange, including digital assets, tokens or coins.
Additionally, the SEC has made a point to focus on these types of platforms in order to safeguard and keep relevant security laws in check.
Australia Taking Similar Steps
In the past week, Australia also took measures to rule out all fraudulent crypto-related activities. It released new regulations that make it mandatory for all cryptocurrency exchange platforms to register and comply with anti-money laundering regulations.
If they fail to do so, they would be eligible to face criminal charges and other civil penalties.