The British Columbia Securities Commission (BCSC) has revealed that LiquiTrade, the entity behind the Latoken crypto exchange, has been found guilty of operating an illegal exchange in Canada. This discovery emerged following an investigation into the exchange's practices, which initially surfaced in November 2022.
The investigation exposed LiquiTrade's facilitation of trading contractual rights linked to underlying crypto assets. Such trading activities mandated registration under the Securities Act, a requirement that LiquiTrade failed to adhere to. Moreover, the regulatory panel determined that LiquiTrade functioned as an exchange without the essential authorization from the BCSC.
Unauthorized Exchange Operations
Under LiquiTrade's management, the Latoken exchange processed a substantial volume of $300 million in daily transactions for its sizable user base of 1.5 million individuals. Despite its significant operations, LiquiTrade had never obtained any form of registration under Canada's Securities Act according to the BCSC's panel. The panel's statement explicitly stated that LiquiTrade had no registration under the Act and did not operate any acknowledged exchange or clearing agency in British Columbia under the name LATOKEN.
Potential Ramifications
LiquiTrade faces potentially severe consequences for its actions. Consequences may include substantial financial penalties and a potential prohibition on its services in Canada. A final decision on these sanctions is anticipated by August 14.
This legal case adds to a series of measures taken by Canadian authorities against unregistered cryptocurrency exchanges. Canada has already prohibited four crypto exchanges, namely Catalyx, KuCoin, Poloniex, and XT.com as of March. In contrast, 15 authorized crypto trading platforms, including Bitbuy, Coinbase, and Fidelity, are permitted to operate in the country.
Commitment to Regulation in Canada
The crackdown on unregistered exchanges underscores Canada's dedication to regulating the cryptocurrency market and safeguarding investors. Despite the regulatory hurdles, licensed trading platforms are flourishing.
Dean Skurka, the CEO of Canadian crypto asset platform WonderFi, observed a resurgence in retail interest in crypto assets. He noted the increase in new user registrations at WonderFi coinciding with Bitcoin's surge to new all-time high prices. Skurka emphasized the gradual nature of this resurgence, indicating positive indications of public acceptance of cryptocurrencies.
This response is based on the article 'LiquiTrade Guilty of Running Illegal Crypto Exchange in Canada' from Latest News and Insights on Blockchain, Cryptocurrency, and Investing.
