The Ontario Securities Commission (OSC) is seeking to bring an enforcement action against Aux Cayes Fintech Co. Ltd., which operates the OKEx platform, for allegedly violating Ontario securities law, according to a statement.
- According to the statement of allegations filed by the OSC’s enforcement team on Aug. 18, Seychelles-incorporated Aux Cayes — which offered securities and derivatives on its OKEx Platform to Ontario residents — failed to comply with registration and prospectus requirements under Ontario securities law. OKEx’s derivatives exchange, ranked second by trade volume, had over US$21.6 billion in 24-hour trading volume as of publishing time, according to CoinGecko data.
- In March, the OSC — the agency that oversees securities legislation in Canada’s largest province by population — issued a warning to crypto asset trading platforms offering trading in derivatives or securities to Ontario residents to comply with the province’s securities laws or face enforcement action.
- Aux Cayes did not contact the Commission by the stipulated deadline of April 19, and only implemented measures to block the creation of new accounts on OKEx after being contacted by the OSC on June 25, according to the statement of allegations.
- The OSC’s enforcement team alleged that Aux Cayes refused to provide the Commission with information about its Ontario-based customers — such as the total number of accounts and their holdings, citing that the information was not available — and continued to allow those customers to trade on OKEx.
- A hearing has been scheduled for Sept. 15. Aux Cayes could potentially be ordered to cease crypto trading, be prohibited from acquiring any securities permanently and pay penalties in the millions for failing to comply with Ontario securities law.
- An OKEx spokesperson told Forkast.News that OKEx had, back in June, “implemented measures aimed at blocking the creation of new accounts by Ontario residents on the OKEx Platform and added Ontario to the list of Restricted Locations on the OKEx Platform website.” The spokesperson declined to comment further on Ontario’s enforcement action.
- Ontario’s move against OKEx is the latest in a series of enforcement actions the Canadian regulator has taken against crypto exchanges including Poloniex, KuCoin and Bybit for failing to comply with Ontario securities registration and prospectus requirements, and comes amid growing scrutiny of cryptocurrency exchanges by regulators around the world.
- Binance, which operates the largest cryptocurrency derivatives exchange by trade volume, has also been under fire from regulators, and recently ceased offering futures and derivatives products to all users of the Netherlands, Germany, Italy and Hong Kong as well as retail users of the United Kingdom.