Coinsquare Charged with Violating Securities Laws
Market manipulation among the charges presented by Ontario Securities Commission (OSC)
What happened?
July 14, 2020: The Ontario Securities Commission (OSC) charged Toronto-based crypto asset trading platform Coinsquare with violating Ontario securities laws, including engaging in market manipulation and misleading its clients about trading volumes.
Between July 2018 and December 2019, Coinsquare allegedly inflated its trading volumes by reporting fake or “wash” trades that represented over 90% of its trading volume. In addition, Coinsquare fired an employee who repeatedly raised concerns about the inflated trading volumes to Coinsquare’s senior management team.
Source: https://www.osc.gov.on.ca/documents/en/Proceedings-SOA/soa_20200716_coinsquare.pdf
Who is impacted?
Coinsquare management, business associates, investors, and other virtual asset service providers doing business with Coinsquare.
Why this matter?
Coinsquare and previous fraudulent virtual asset service providers such as Quadriga, Einstein, and Mount Cox continue to struggle with creating a viable and compliant business model in Canada
Internationally, companies that enter into or are considering a business relationship with Coinsquare will need to assess their anti-money laundering risk in light of this statement.
What’s next?
According to the OSC, one of Coinsqaure’s biggest failure was the decision by both management and directors not to ensure the company had strong governance and compliance in place. Coinsquare, and those doing business with the company, can expect additional scrutiny from both regulators and the market. In the meantime, Wealthsimple, an existing OSC regulated fintech, has recently entered the Canadian virtual asset market.
learn more
Is your AML compliance too expensive, time-consuming, or ineffective?
iComply enables financial services providers to reduce costs, risk, and complexity and improve staff capacity, effectiveness, and customer experience.
Request a demo today.
Overcoming Challenges in Digital Identity Verification for Enhanced Security
In an increasingly digital world, verifying the identity of individuals in online networks has become an essential part of security and compliance measures. With users from all over the globe utilizing digital applications to handle their banking, asset management,...
The Impact of Neobanks on AML and KYC Compliance: Ensuring Security in a Decentralized Era
As global financial institutions collectively face the reality of managing a consumer base that has aggressively adopted an increasingly digital presence, traditional banks are also facing a rising challenge in competing against a rapidly decentralizing model of...
Implementing Client Due Diligence in Credit Unions: Protecting Members and Ensuring Compliance
The evolving financial and political climate of 2023 and a post-pandemic market have left financial institutions and credit unions facing unique challenges as they navigate the new and growing risks associated with conducting business in an increasingly digital world....