Bybit under pressure from Ontario regulator after being forced out of the UK

Rick Steves

Bybit has recently been forced to close its operations in the United Kingdom following the ban on Crypto CFD products earlier this year. 

Bybit is being accused by the Ontario Securities Commission (OSC) for failing to comply with Ontario securities law as it operates an “unregistered crypto asset trading platform”.

The statement of allegations says that the firm incorporated in the British Virgin Islands encourages Ontarians to use the unregistered platform, allowing them to trade crypto asset products that are securities and derivatives.

Two months ago, the regulator warned crypto asset trading platforms that offer trading in derivatives or securities in Ontario that they must contact OSC staff or face potential regulatory action.

Platforms were given until April 19, 2021 to discuss how to bring their operations as a dealer or marketplace into compliance. Additionally, the OSC stated that platforms that allow access to Ontarians are regarded by the OSC as operating in Ontario for the purposes of securities regulation.

Bybit seems to have made no comment on the OSC’s allegations nor it has contacted the regulator in order to comply with the requirements. The British Virgin Islands Financial Services Commission has assisted the OSC in the Bybit matter.

The OSC will continue its crackdown on non-compliant crypto asset trading platforms and are in contact with international securities regulators to exchange information to support enforcement action.

Bybit has recently been forced to close its operations in the United Kingdom following the ban on Crypto CFD products earlier this year.

In the follow-up of Bybit’s UK operation shut down, the cryptocurrency derivatives exchange appointed Daniel Lim as general counsel.

A spokesperson to the company told FinanceFeeds the hire of Daniel Lim is a reaction to the ban on crypto CFDs that will come into effect March 25.

“After the UK ban, Bybit is taking a proactive measure to avoid this from happening in other jurisdictions by adding internal legal counsel to their team.”

The crypto derivatives ban in the UK has been a hard blow for the ecosystem that was establishing itself in the jurisdiction. Many big names within the industry were already offering their clients access to crypto trading.

IG Group was one of them. Following the ban on the sale of derivatives and exchange-traded notes (ETNs) that reference cryptoassets to retail consumers, the trading company announced it will end its crypto offering by March 24, 2021.

There is, however, some irony to the crypto CFD ban in the UK. The Financial Conduct Authority has revealed this week that crypto holders have risen by 21%, to 2.3 million people.

The FCA has recently announced it is going after crypto firms with 52 new investigations being launched. The disclosure comes after bitcoin and other cryptocurrencies won endorsements from well-known business figures including Elon Musk.

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