The OSC released a Statement of Allegations against Bybit Fintech Limited for “failing to comply with Ontario securities law.”
Bybit is incorporated in the British Virgin Islands. The company has allegedly been 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,” the OSC noted.
As stated in the release from the Canadian regulator:
“On March 29, 2021, the OSC warned crypto-asset trading platforms that offer trading in derivatives or securities in Ontario that they must contact OSC staff or face potential regulatory action. Platforms were given until April 19, 2021 to discuss how to bring their operations as a dealer or marketplace into compliance. Additionally, the OSC stated that platforms that allow access to Ontarians are regarded by the OSC as operating in Ontario for the purposes of securities regulation.”
As noted in the release, ByBit failed to contact the OSC, despite this warning.
The OSC confirmed that staff would continue to take appropriate action against non-compliant cryptocurrency trading platforms and are currently “in contact with international securities regulators to exchange information to support enforcement action.”
As noted in the announcement, the OSC “thanks the British Virgin Islands Financial Services Commission for their assistance in the Bybit matter.”
The update further noted that the OSC continues “to add unregistered crypto asset trading platforms, including 12 platforms that were added recently, to its Investor Warning List.”
The announcement also clarified that the mandate of the OSC is “to provide protection to investors from unfair, improper or fraudulent practices, to foster fair, efficient and competitive capital markets and confidence in the capital markets, to foster capital formation, and to contribute to the stability of the financial system and the reduction of systemic risk.”
The regulator reminded investors to regularly “check the registration of any persons or company offering an investment opportunity and to review the OSC investor materials” (which are accessible at http://www.osc.ca).