Bybit announced that it reached a settlement agreement with the Ontario Securities Commission (OSC) on Thursday, a day after the OSC released a Statement of Allegations against the crypto asset trading platform.
The agreement includes several measures to be taken by Bybit as it engages in registration talks with the Canadian regulator. This announcement comes after the OSC issued financial penalties against Bybit and KuCoin, claiming violation of securities laws and operating unregistered crypto-asset trading platforms.
According to the Settlement Agreement, Bybit has disgorged revenues totaling approximately $2.47 million and compensated the OSC $7,707 (CAD 10,000) for costs. No additional monetary penalties were levied on Bybit as part of the agreement.
Also, Bybit announced that it would not accept new accounts from Ontario residents, provide any new goods to existing accounts held by Ontario investors, or conduct marketing and promotional efforts targeted at Ontario residents.
Registration discussions with the provincial regulator are currently underway, and if the process fails, Bybit will cease operations in Ontario. Investors who already own cryptocurrencies on Bybit will be required to terminate their positions in specific restricted products such as leveraged contracts, margin trading, or credit extension. Retail investor funds or assets in Ontario that are unspent or unutilized may be used for unrestricted products or withdrawn from the Bybit platform, the exchange noted.
Ben Zhou, co-founder and CEO of Bybit in a statement noted that:
“We appreciate the OSC’s efforts in protecting Ontario investors and look forward to cooperating with the OSC in all respects in the registration process.”
The decision by the regulator was the latest in a string of warnings and legal actions taken against crypto exchanges that provide services to Ontario consumers. In March 2021, the OSC issued a deadline for crypto firms operating in Ontario to register with the province’s securities laws by April. Ontario has eight registered cryptocurrency trading platforms, including Fidelity Digital Assets, Bitvo, and Bitbuy, as of June 1.