In a recent development, the Canadian regulatory agency, the British Columbia Securities Commission (BCSC), has found LiquiTrade guilty of violating Canada's Securities Act.
Notably, in November 2022, LiquiTrade's cryptocurrency exchange, Latoken, was accused of falling short of Canada's Securities Act. The allegation was conveyed in a news release by the BCSC dated 16th November 2022.
"The B.C. Securities Commission (BCSC) alleges that the operator of a crypto asset trading platform is facilitating derivatives transactions without being registered and is operating as an exchange in B.C. without being recognized by the Commission," stated the regulatory agency.
LiquiTrade Becomes Guilty After Two Years
Following the above allegations, investigations have been ongoing for almost two years, with the recent findings affirming that the exchange was guilty.
Among other crimes, the BCSC stated that LiquiTrade was never approved to operate under the Securities Act. In addition, the Latoken exchange was unrecognized by the BCSC.
Also noteworthy was that LiquiTrade allowed investors to market contractual rights of their digital assets, which included derivatives capital. This was illegal as every financial institution must enroll under the Securities Act to host contract trading features in the Canadian province of British Columbia.
Possible Penalty For Violating Securities Act
At the time of writing, details on the possible nature of LiquiTrade's punishment remain unknown. However, based on speculations, it could range from a massive fine to suspension of their services in the region. Nevertheless, the final decision rests on the court’s ruling by August 2024.
Meanwhile, in March this year, the country banned many exchanges, including Poloniex, Kucoin, Catalyx, etc. In stark comparison, Canada had issued operational licensing to others, authorizing their operations in the country. These included Coinbase, Bitbuy, etc.
On the other hand, Binance is facing anti-money laundering charges in Canada, for which it declared its intention to appeal an imposed $4.4 million fine.
