With $53 billion in trading volume in the last week, Bybit, one of the world’s top five crypto exchanges, is in hot water with Canadian regulators, as are other large crypto trading platforms.
The British Virgin Islands-based company has been charged with “operating an unregistered crypto asset trading platform, encouraging Ontarians to use the platform, and allowing Ontario residents to trade crypto asset products that are securities and derivatives” by the Ontario Securities Commission (OSC).
The OSC had requested that Bybit contact it on March 29 to discuss ways to bring the exchange into conformity with Ontario securities law, but had not received a response. It has now added Bybit to its investor watch list and set a July 15 hearing date.
At that hearing, the OSC will consider staff recommendations that Bybit stops dealing in securities and be barred from acquiring securities “permanently or for such duration as the Commission specifies.” The staff has also proposed a $1 million administrative penalty for each violation of Ontario securities law.
Another exchange, KuCoin, was hit with a similar enforcement action by the government earlier this month. Poloniex was also accused of not following the OSC’s registration process last month. The exchange’s reasoning is essentially the same in each case: it sells securities and derivatives to Ontario citizens, which means it must follow the province’s securities regulations.
Bybit is a major backer of the Peter Thiel-backed BitDAO, which revealed last week that it had raised $230 million to support decentralized financial projects with grants, liquidity, and technical knowledge. BitDAO has been promised a portion of its futures contract trading.
Is it, however, registered in Ontario?