Author: Arijit Sarkar, CoinTelegraph; Translated by: Wuzhu, Golden Finance

A panel set up by the British Columbia Securities Commission (BCSC) ruled that LiquiTrade was operating an illegal exchange in Canada.

LiquiTrade’s Latoken cryptocurrency exchange was initially charged with violating Canadian securities laws in November 2022, when it processed $300 million in daily trading volume for its 1.5 million user base.

Investigating the Latoken cryptocurrency exchange

After nearly two years of investigation, the BCSC panel found that LiquiTrade violated Canadian securities laws:

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

Canadian agency points to multiple violations by LiquiTrade

The BCSC panel found that LiquiTrade allowed users to trade contractual rights on underlying crypto assets, which is considered a derivative investment.

As such, LiquiTrade must register under the Securities Act before it can legally facilitate contract trading in Canada, specifically in British Columbia. The statement added:

"The panel also found that LiquiTrade was operating as an exchange. However, it was not authorized by the BCSC, as required under the Act."

Canada has banned four cryptocurrency exchanges, including Catalyx, KuCoin, Poloniex, and xt.com Exchange, as of March 2024. On the other hand, 15 cryptocurrency trading platforms are authorized to operate in the region, including Bitbuy, Coinbase, and Fidelity.

The upcoming sanctions against LiquiTrade could include fines and a ban on providing services.

LiquiTrade approves submission schedule. Source: bcsc.bc.ca

Sanctions against LiquiTrade will be finalized on August 14, according to court documents.

Despite Canada’s crackdown on unregistered cryptocurrency exchanges, licensed trading platforms are still thriving.

“We are definitely seeing a resurgence in retail trading,” Dean Skurka, CEO of Canadian crypto asset platform WonderFi, said in an interview.

“It’s not going to happen overnight,” Skurka said, but the indicators of public acceptance of cryptocurrencies are there. He pointed to a surge in new signups at WonderFi and a record high for BTC.