Ontario Securities Commission (OSC) has decided to start a new era of compliance for the crypto exchanges operating in Canada. That will include undertaking an enforcement action against Poloniex, a crypto exchange platform operating in Canada.
Like the U.S., Canadian authorities prefer treating decentralized crypto assets like Bitcoin and Ethereum as commodities instead of securities. However, Poloniex, which is headquartered in the U.S. treats customers’ assets it holds as securities.
OSC chairman and CEO Grant Vingoe, revealed earlier this month how Poloniex was treating investors’ crypto assets as securities and derivatives. Vingoe further claims that Poloniex does not facilitate the trading of crypto assets in investors’ portfolios. But instead, they only provide them with contracts or instruments of crypto assets.
Due to these concerns, the OSC notified crypto exchanges in March to contact the regulator to get their operation in line with the expectation. Failure to do so, OSC has to take action against them.
It seems like Poloniex is taking the OSC approach seriously, a representative of OSC confirmed that 70 crypto exchanges have reached out and are beginning compliance talks. So far, only crypto assets dealer has been fully registered with the Canadian securities regulators.
OSC is unlikely to initiate proceedings against the crypto exchange platform, participants not complying will be forced to exit the market.