The Ontario Securities Commission’s (OSC) crackdown on unregistered, offshore crypto firms came swiftly, but it will take 12 months to bring that first case before the regulator’s tribunal.
Following a teleconference hearing today, the OSC issued an order setting down the schedule for a hearing into the allegations against Polo Digital Assets Ltd., a Seychelles-based firm the OSC has accused of violating securities law by operating an unregistered crypto trading platform that serves investors in Canada.
On May 25, the OSC filed its allegations against Polo Digital (which operates the Poloniex platform) — the first case it brought since issuing a warning to crypto firms that they should contact Canadian regulators to start the process of seeking registration.
Firms that ignored that warning have since faced enforcement action, starting with Polo Digital.
In today’s order, the OSC indicated its hearing into those allegations will start May 19, 2022 by videoconference, and is scheduled to continue from May 25 through June 3.
The OSC first issued its warning to crypto firms at the end of March, giving those firms three weeks to get in touch regarding registration.
It only took a month after that to file an enforcement action, but it will still be a full year since the original allegations before the hearing takes place.
Canadian regulators have taken the stance that crypto trading platforms are straying into trading securities and/or derivatives as they allow clients to trade contracts based on crypto assets — and those contracts amount to securities or derivatives (which require registration).
A number of firms have begun the registration process, and regulators have granted time-limited exemptions to a handful of firms to allow them to deal in crypto contracts, subject to certain conditions, while they seek registration.