Crypto derivatives exchange Bybit and Ontario Securities Commission agree on enforcement proceeding schedule

The Ontario Securities Commission in Canada and Bybit, a cryptocurrency derivatives exchange headquartered in Singapore, have come to an agreement on the schedule for Bybit’s upcoming enforcement proceeding, according to the OSC.

Fast facts

• The first hearing between Bybit and the OSC — the agency that oversees securities legislation in Canada’s largest province by population — is scheduled for tomorrow, July 15, and will held via correspondence between the two parties.

• The OSC will provide Bybit non-privileged relevant documents by Aug. 16, and Bybit will have until Oct, 12 to file any motion on document discovery, according to their agreement. The OSC will serve and file its witness list by Oct. 15. A further hearing by teleconference is scheduled for Oct. 22.

• Last month, the OSC sought to bring enforcement action against British Virgin Islands-incorporated Bybit — the fourth-largest crypto derivatives exchange in the world, according to CoinGecko data — for “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’s move against the Bybit was among the series of enforcement actions the Canadian regulator has taken against crypto exchanges including Poloniex and KuCoin, for failing to comply with Ontario securities registration and prospectus requirements.

• Regulators around the world have been stepping up their oversight of cryptocurrency exchanges in response to the global anti-money laundering and counter-terrorist financing standards-setter Financial Action Task Force’s revised Standards for Virtual Assets and Virtual Asset Service Providers (VASPs). Like Binance, the largest cryptocurrency exchange in the world by market value, Bybit has also received warnings from Japan’s Financial Services Agency and the U.K.’s Financial Conduct Authority for operating without authorization.

• This week, Bybit announced that it was introducing more stringent know-your-customer (KYC) requirements for individuals and businesses starting mid-July.