Bybit Exchange Reaches Settlement Agreement with Ontario Regulator

Bybit, a cryptocurrency exchange, has announced that it has reached a settlement agreement with the Ontario Securities Commission (“OSC”) regarding the issues raised in the OSC’s Statement of Allegations of June 21, 2021. In a nutshell, in accordance with the terms of the Settlement Agreement, Bybit has agreed to return roughly $2.47 million USD in profits. These are monies that were obtained through its Ontario accounts. Also, the company has agreed to pay OSC $10,000 CAD to cover the costs incurred. Bybit was not subjected to any additional financial penalties.

How it all started and where it could go

Two days ago, the OSC found that the Bybit and KuCoin exchanges were operating non-compliant platforms. Specifically, the platforms illegally permitted residents of Ontario to trade unregistered securities. Unlike Bybit, however, KuCoin has been accused of refusing to cooperate with the OSC’s probe. This has resulted in a $1.6 million penalty and a permanent ban on KuCoin from participating in Ontario’s financial markets.

Meanwhile, Bybit has agreed not to open new accounts for Ontario residents while the registration process is continuing. In addition, it did not offer any new products to Ontario investors who already had accounts with the company. The company also didn’t engage in any marketing or promotion efforts aimed specifically at citizens of Ontario. But Bybit will shut down its Ontario operations if the registration talks fail.

Bybit CEO and co-founder Ben Zhou had the following to say about the company:

“It has always been our primary objective to operate our business in compliance with all relevant rules and regulations in Ontario. Bybit took immediate steps to cooperate with the OSC upon being notified of the issuance of the Statement of Allegations and we have started the registration and compliance process in Ontario,”

Bybit will require existing Ontario retail investors to liquidate their stakes in certain restricted items. Leverage, margin or credit extension arrangements are among these. Furthermore, Ontario residents can withdraw any funds or assets that are still in their accounts. Alternatively, they can use the funds to purchase products that are not subject to restrictions.