Hong Kong–based crypto platform CoinEx Global Ltd. and its founder have been sanctioned in Quebec for trading and distributing securities without registration.
In response to an enforcement case brought by the Autorité des marchés financiers (AMF), the province’s Financial Markets Administrative Tribunal imposed a $2-million penalty against the companies that constitute the CoinEx platform, and ordered that its founder, Haipo Yang, pay $300,000 for violating Quebec securities law.
The sanctions follow a finding that CoinEx and Yang acted as securities and derivatives dealers without being registered, and distributed securities without a prospectus or exemption — ignoring the Canadian regulators’ efforts to bring the crypto sector into the regulated sphere.
Along with the financial sanctions, the tribunal ordered CoinEx to block access to its website for investors in Quebec within two months, and Yang was banned for five years.
According to a translation of the tribunal’s decision provided by the AMF, the regulatory tribunal said the case requires “significant administrative penalties be imposed on the respondents, as their willful non-compliance with securities legislation must not be tolerated. Investor protection and the orderly functioning of financial markets are at stake.”
“The imposition of such a penalty must discourage other cryptoasset trading platforms that may be contravening securities legislation and must serve the purpose of motivating them to comply,” it said.
“This new decision follows the important decision obtained in XT.com earlier this year and is part of the AMF’s offensive against cryptoasset trading platforms operating illegally in Quebec that have not entered into pre-registration undertakings,” said Éric Jacob, executive director, enforcement, with the AMF.
“The AMF will continue its coordinated efforts with other members of the Canadian Securities Administrators to ensure that cryptoasset trading platforms comply with Canadian securities and derivatives legislation,” he said.