Breaking: LiquiTrade Found Guilty of Illegal Crypto Exchange Operations in Canada
A recent investigation by the British Columbia Securities Commission (BCSC) has revealed that LiquiTrade, the operator of the Latoken crypto exchange, has been operating an illegal exchange in Canada. The BCSC panel found LiquiTrade guilty of violating Canadian securities legislation by facilitating daily transactions worth $300 million for its 1.5 million user base without proper registration.
LiquiTrade Violated Securities Act
The BCSC panel’s investigation concluded that LiquiTrade allowed users to trade contractual rights of underlying crypto assets, which are considered derivatives investments. As a result, LiquiTrade was required to be registered under the Securities Act before facilitating contract trading in Canada, particularly in British Columbia.
- The panel revealed that LiquiTrade was not registered under the Act
- There was no recognized exchange or clearing agency operated by LiquiTrade in British Columbia
- LiquiTrade operated as an unauthorized exchange
Penalties on the Horizon for LiquiTrade
Sanctions against LiquiTrade are set to be imposed by August 14, with potential consequences ranging from monetary fines to a complete ban on services. This ruling is part of a broader crackdown on unauthorized crypto exchanges in Canada, with LiquiTrade joining the list of banned platforms like Catalyx, KuCoin, Poloniex, and xt.com exchange.
However, amidst increased regulatory scrutiny, some crypto firms have opted to exit the Canadian market. In response to the changing landscape, exchanges like Coinbase have taken steps to adapt to the evolving regulatory environment by appointing new leadership and committing to compliance.
Regulatory Landscape in Canada
In an effort to protect investors, Canadian authorities have introduced new rules for crypto firms operating in the country. The Canadian Securities Administrators have mandated that companies make commitments to safeguard investors through enhanced pre-registration undertakings. These requirements include measures such as:
- Segregation in crypto custody
- Presence of a chief compliance officer
- Elimination of leveraged trading
- Prohibition on trading or holding stablecoins
While some exchanges have chosen to exit the market due to regulatory pressures, others remain committed to compliance and success in the regulated Canadian market.
Warning Against Crypto Scams
Earlier this year, the Canadian Anti-Fraud Centre (CAFC) issued a warning about a surge in crypto scams targeting Canadian citizens. In collaboration with the Canadian Investment Regulatory Organization (CIRO), the CAFC has raised awareness about sophisticated scams, particularly those involving prolonged online communication.
Hot Take: Upholding Regulations in the Crypto Market
As regulatory authorities in Canada crack down on unauthorized crypto exchanges, the recent ruling against LiquiTrade highlights the importance of compliance in the industry. While some companies are facing penalties for violating securities legislation, others are taking steps to adapt to changing regulations and protect investors in the evolving crypto landscape.
Sources: BCSC Panel Verdict
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