Canada Cracks Down on LiquiTrade for Securities Act Violation

British Columbia Securities Commission (BCSC) has recently concluded the LiquiTrade case. The regulator put together a panel of legislators to conduct investigation into this case.

After conclusion, the BCSC found LiquiTrade guilty of performing illegal transactions in Canadian territory. As per details, the exchange was charged with breaking the Securities Act for its Latoken listing. The first accusation of infringement was made in November 2022.

Latoken Crypto Exchange

At the time, Latoken was supporting $300 million in daily transaction volumes and catering to a user base of 1.5 million. After a brief period of two years, BCSC panel issued a guilty verdict for LiquiTrade and claimed that it was in violation of the Securities Act of Canada.

The panel noted that this exchange did not apply for registration or acquire it in any form as per the directions of the securities act. Furthermore, there are no set trading platforms or clearing agencies in the British Columbia territory, which is operated by LiquiTrade.

The platform also does not render the services of any clearing houses or brokerages that operate under the name of Latoken. The BCSC panel further revealed that LiquiTrade has continued to operate as a cryptocurrency exchange but it did not have any legal authorization to undertake such responsibilities or offer these financial services.

Since March 2024, Canada imposed a ban on 4 trading platforms operating within its jurisdiction namely KuCoin, Poloniex, Xt.com, and Catalyx.

Canadian Regulators to Take Action Against Illegal Crypto Exchanges

In addition to the crypto exchange bans, the regulators in Canada have also undertaken strict regulatory stance towards the local crypto industry. On this account, the regulatory agencies in this region have allowed only 15 trading firms to operate with the license within its boundaries.

Some of these firms are inclusive of names such as Fidelity, Bitbuy, and Coinbase. The anticipated ban and regulatory action against LiquiTrade are expected to arrive in the form of fines and possible ban.

A court filing associated with this matter has indicated the probable or under consideration sanctions against LiquiTrade. The courts have set a timeline of 14th August to finalize the decision on this lawsuit.

It is visible that the Canadian government has continued to take regulatory action against unauthorized and unregistered crypto trading platforms. On this front, the crypto sector only comprising of regulated trading platforms has continued to expand and grow.

CEO of WonderFi, Dean Skurka, commented on the changing and shifting regulatory landscape for cryptocurrency firms in Canada. He stated that the firm is looking at a retail sector that has made a visible comeback into the crypto industry.

He noticed that the shift in trend was not going to take place suddenly but it consists of various indicators as a sign of accumulating public interest into cryptocurrencies. He further noticed that the total number of new account registrations on WonderFi has also undergone a visible incline recently.

DeFi Technologies to Acquire Stillman Digital

DeFi Technologies, a listed cryptocurrency platform operating in Canada recently signed a deal to purchase Stillman Digital. It is an all-stock contract, which is set to bring changes into the Canadian crypto platforms as per analysts.

The article asserted that the deal is going to change this into a smaller version of Galaxy Digital. The deal is valued at $4.22 million Canadian dollars.

As per DeFi Technologies CEO, Olivier Roussy Newton, the deal buy out will expand upon the trading sector, diversify the client base, and profit channels. The executive indicated that the deal was finalized on paper but it was still underway.

Once the deal is completed, it will allow DeFi Technologies to operate as a miniature version of Galaxy Digital and contain various product offerings from the American digital currency trust fund.

Mark Palmer, the founder and head of Benchmark Company stated that the in-process acquisition deal is indicative of the digital platform requirement for expansion and diversification as a way to keep up with the sharp changes taking place in digital currency space.