Canada Targets LiquiTrade for Major Securities Act Violation

YEREVAN (CoinChapter.com) — A British Columbia Securities Commission (BCSC) panel has found LiquiTrade guilty of running an illegal exchange in Canada. This verdict, issued nearly two years after the initial accusation, could lead to severe sanctions, including hefty fines and a possible ban on services.

LiquiTrade’s Legal Trouble: Running an Illegal Exchange

In November 2022, LiquiTrade’s Latoken crypto exchange was accused of violating Canada’s Securities Act. The exchange processed $300 million in daily transactions for its 1.5 million users without proper registration. According to the BCSC, this oversight made LiquiTrade operate illegally.

BCSC Alleges Violations by LiquiTrade. Source: BCSC

LiquiTrade facilitated the trading of contractual rights of underlying crypto assets, considered derivative investments. Under Canadian law, this trading required registration, which LiquiTrade lacked. The panel highlighted:

“LiquiTrade has never been registered in any capacity under the Act, and there is no recognized exchange or clearing agency in British Columbia operated by LiquiTrade or using the name LATOKEN.”

BCSC Findings on LiquiTrade Ltd.. Source: BCSC LiquiTrade Faces Severe Penalties and Potential Ban in Canada by August 14″

LiquiTrade’s violations could lead to severe consequences. Potential sanctions include substantial monetary penalties and a ban on operating in Canada. These sanctions are set to be finalized by August 14, according to court documents.

A timeline for submissions on sanction for LiquiTrade. Source: bcsc.bc.ca

This case adds LiquiTrade to the list of banned crypto exchanges in Canada. Other banned exchanges include Catalyx, KuCoin, Poloniex, and xt.com. However, 15 crypto trading platforms remain authorized, such as Bitbuy, Coinbase, and Fidelity.

Strict Rules Boost Crypto Interest, Says WonderFi CEO

The crackdown on unregistered exchanges like LiquiTrade highlights Canada’s strict regulatory environment. Yet, properly licensed platforms continue to thrive in Canada. Dean Skurka, CEO of WonderFi, a Canadian crypto asset platform, commented:

“We have certainly seen retail come back.”

Skurka noted that the public’s interest in crypto remains high, despite the stringent regulatory landscape. He pointed out that WonderFi saw a spike in new signups that coincided with Bitcoin’s recent price surge and popularity over the past months.

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