Investigating the Latoken Crypto Exchange

A panel set up by the British Columbia Securities Commission (BCSC) has found LiquiTrade guilty of running an illegal exchange in Canada.

This ruling follows an extensive investigation into LiquiTrade's Latoken crypto exchange, which was initially accused of violating Canada's Securities Act in November 2022. At that time, the platform processed $300 million daily transactions for its 1.5 million user base.

Nearly two years into the investigation, the BCSC panel concluded that LiquiTrade violated Canadian securities legislation. The panel stated:

"LiquiTrade has never been registered in any capacity under the Act, and there is no recognized exchange or clearing agency in British Columbia operated by LiquiTrade or using the name LATOKEN."

Canadian Agency Cites Multiple Violations

The findings revealed that LiquiTrade enabled users to trade contractual rights of underlying crypto assets, considered derivatives investments.

As a result, the platform was required to be registered under the Securities Act before it could legally facilitate contract trading in Canada, specifically in British Columbia. The statement added:

"The panel also found that LiquiTrade was operating as an exchange. But it was not authorized to do so by the BCSC, as required by the Act."

Ongoing Crackdown on Unregistered Exchanges

As of March 2024, Canada has banned four crypto exchanges: **Catalyx, KuCoin, Poloniex, and **xt.com.

On the other hand, 15 crypto trading platforms are authorized to operate in the region, which includes Bitbuy, Coinbase, and Fidelity.

This highlights the Canadian authorities' commitment to regulating the crypto market and ensuring only compliant platforms operate within their jurisdiction.

Upcoming sanctions on LiquiTrade could range from monetary penalties to a complete ban on its services. According to the court filing, these sanctions will be finalized by August 14, leaving the crypto community eagerly awaiting the final verdict.

Licensed Platforms Continue to Thrive

While Canada cracks down on unregistered crypto exchanges, licensed trading platforms thrive.

In an interview with Cointelegraph, Dean Skurka, CEO of Canadian crypto asset platform WonderFi, expressed optimism. He stated, "We have certainly seen retail come back."

Skurka noted that while mass adoption may not happen overnight, indicators of public receptiveness to crypto are evident. New signups spiked at WonderFi along with the all-time high price for BTC.