The Ontario Securities Commission (OSC) has claimed that bitcoin exchange operator OKEx has breached the province's Securities Act.
According to the statement, Seychelles-based Aux Cayes Fintech provides residents in the Canadian region through the OKEx platform with access to cryptocurrency products that qualify as securities and derivatives.
In doing so, the firm is not complying with legal registration and disclosure requirements, the OSC's unit claims.
In March 2021, the regulator notified cryptocurrency companies and platforms to bring their operations in line with regulatory requirements.
The commission ordered them to contact its staff by 19 April to discuss the measures. Aux Cayes did not do so.
Only after the regulator's request, around June 25, did the company block the registration of new Ontario resident accounts on OKEx and put the region on its list of restricted jurisdictions.
The firm also told the OSC that it would identify Ontario customers in order to close accounts and help with withdrawals. However, Aux Cayes refused to provide the regulator with data on the number of such users and the amount of funds in their accounts.
"As of the date of this application, Aux Cayes allows cryptocurrency products on the OKEx platform to be traded by existing accounts of Ontario residents," the OSC said in the document.
The OKEx operator faces sanctions, including a ban on trading in cryptocurrency products and the purchase of any securities, as well as fines and reimbursement of the costs of the investigation against the company.
As a reminder, the OSC has previously accused companies associated with the KuCoin exchange of violating securities laws.
In June, Binance decided to stop serving Ontario residents. In August, BitMEX followed suit.