Canadian stock regulators have begun implementing measures against the world’s largest cryptocurrency exchange, Poloniex.
On Tuesday, the Ontario Securities Commission issued a lawsuit against Polo’s digital assets, also known as Poloniex, alleging that the company did not comply with the Ontario Securities Act.
Poloniex never registered with the agency, but encouraged Canadians to use its platform and allowed Ontario residents to trade cryptocurrency derivatives and securities, according to the statement. OSC wrote: “Poloniex has never submitted a prospectus to the Commission and has never been exempted from the prospectus requirement.”
The OSC notes that since the establishment of Poloniex in the Republic of Seychelles, the Seychelles Financial Services Authority has assisted Canadian regulators in this matter.
The new move came about two months after the OSC notified Ontario’s crypto exchanges that they must comply with local securities laws or meet potential regulatory action. Cryptocompanies were asked to contact OSC by April 19, 2021 to discuss how they could conduct their transactions as a trader or marketplace.
“Despite this warning, Poloniex did not contact the Commission until April 19, 2021 or at any time to initiate a compliance discussion,” the organizer said.
As such, the OSC police authorities demanded that the committee instruct Poloniex to cease trading in securities or derivatives forever or for a period specified by the regulator. Employees also demanded that Poloniex be banned from buying securities and be registered as an investment manager.
The statement said Poloniex had to pay an administrative fine of up to C $ 1 million for each breach of the Ontario Securities Act.
Poloniex did not immediately respond to Cointelegraph’s request for comment.
“There is currently only one crypto-asset trader registered with the Canadian Securities and Exchange Commission,” OSC said. The agency notes that to date, more than 70 platforms have started compliance discussions with Canadian securities regulators.