Poloniex To Face Regulatory Action For Violating Securities Laws In Canada

Poloniex To Face Regulatory Action For Violating Securities Laws In Canada

The Canadian securities regulator, the Ontario Securities Commission, has accused the cryptocurrency exchange Poloniex of flouting Ontario securities law.

Ontario Regulator Files Statement Of Allegations Against Poloniex

The regulator filed a statement of the allegation on Tuesday, claiming that Poloniex failed to seek approval as a crypto trading platform operating in the province.

The Canadian agency identified Poloniex’s crime of holding digital assets in custody as a third party and argued that any assets held on a trading platform could be securities. The regulator went on to explain:

“While Poloniex purports to facilitate the trading of the crypto assets in its investors’ accounts, in practice, Poloniex only provides its investors with instruments or contracts involving crypto assets. These instruments or contracts constitute securities and derivatives.”

The regulator currently seeks CA$1 million ($830,000) fines for each “failure to comply.” The first hearing on the matter is scheduled for June 18.

The OSC had previously warned crypto exchanges in the province that trade securities and derivatives to get in contact with the regulator or face regulatory action.

The agency set a deadline of April 19, 2021, for exchanges to comply with the registration requirement, which had more than 70 exchanges in compliance. However, Poloniex did not take part.

Cryptocurrencies Labelled As Securities

As the crypto market encounters a volatile period amid worldwide support, regulators have become more cautious about enforcing regulations.

However, one thing that has stirred confusion regarding cryptocurrency regulations is identifying what type of digital assets are labeled as securities. In the US, regulators like the Securities and Exchange Commission have targeted crypto firms for selling tokens as unregistered securities.

A good example is Ripple Inc, the payment solutions provider sued by the SEC in December last year for allegedly selling its XRP tokens in unregistered security offerings to investors. In March, the SEC also sued crypto startup LBRY Inc, accusing the company of selling unregistered securities in the form of its token.

Unlike the US, Canada has been more friendly regarding crypto regulations. The North American country is also the first to support Bitcoin exchange-traded funds (ETF) in the region.

This year the OSC already approved three Bitcoin ETF issuers. The first two approved include the Purpose Bitcoin ETF (BTCC) and the Evolve Bitcoin ETF (EBIT), both listed on the Toronto Stock Exchange.

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Author: Jimmy Aki

It’s Time for Ethereum: Two Ether ETF Approved by Canadian Securities Regulators

It’s Time for Ethereum: Two Ether ETF Approved by Canadian Securities Regulators

One of the products is from Purpose Investments, which launched the world’s first Bitcoin ETF that has amassed 18,500 BTC in just two months, and another is from Mike Novogratz’s Galaxy Digital.

While Bitcoin exchange-traded funds have been the talk of the town, Ethereum is not far behind as Canada approves two Ether ETFs in one day.

Canadian securities regulators have cleared asset manager Purpose Investments to launch the first direct Ether ETF in the world.

The Purpose ETF is designed to provide investors exposure to the second-largest cryptocurrency by investing directly in physically settled Ether (ETH) tokens.

“While Bitcoin tends to get a lot of attention as it was the first major cryptocurrency, what Ether and the Ethereum ecosystem represent is one of the most exciting new technology visions today in society.”

Som Seif Founder, and CEO of Purpose Investments

On February 18th, the company launched the world’s first Bitcoin ETF, which currently manages nearly 18,500 BTC, with assets under management (AUM) reaching CAD 1.43 billion ($1.14 billion). BTC -1.26% Bitcoin / USD BTCUSD $ 60,885.86
-$767.16-1.26%
Volume 65.98 b Change -$767.16 Open $60,885.86 Circulating 18.69 m Market Cap 1.14 t
11 h It’s Time for Ethereum: Two Ether ETF Approved by Canadian Securities Regulators 1 d Miami-Dade County Task Force Is Looking at Ways for Residence to Pay Taxes Using Crypto 1 d UK Hedge Fund Brevan Howard Plans to Invest 1.6% of $5.6B Capital in Cryptocurrencies

“Ether is the cryptocurrency we believe has the most potential for the future and is where our expertise really lies. Building this ETF is not only a natural extension to the Purpose Investments digital asset lineup, but a natural fit for us at Ether Capital working alongside Purpose.”

Brian Mosoff Ether Capital CEO

Purpose will act as the manager of the ETF while Gemini is the sub-custodian and CIBC Mellon Global Securities Services Company acting as fund administrator.

The second Ether ETF approved is CI Galaxy Ethereum ETF by CI Global Asset Management and Mike Novogratz’s Galaxy Digital.

With a management fee of 0.40%, the ETF will also invest directly into Ether and is expected to start trading on the Toronto Stock Exchange (“TSX”) on April 20, 2021, subject to TSX approval.

They also launched a CI Galaxy Bitcoin ETF last month with the lowest management fee.

CI GAM is the manager of the Ether ETF, and Galaxy Digital Asset Management serves as the sub-advisor.

“The CI Galaxy Ethereum ETF gives investors a simplified path to benefit from the explosion of decentralized applications being built on Ethereum.”

Steve Kurz Partner and Head of Asset Management at Galaxy Digital

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Author: AnTy

Publicly-Traded Canadian FinTech Company Invests 1.5% of its Assets into Bitcoin

Publicly-Traded Canadian FinTech Company Invests 1.5% of its Assets into Bitcoin

The $1.5 Million worth of corporate Bitcoin investments is just the beginning, MOGO plans to buy more BTC next year.

Canadian Fintech company MOGO is investing $1.5 million in Bitcoin. This investment represents the company’s 1.5% assets, as of the end of the third quarter of 2020. But the company is not done with its Bitcoin investment, it plans to do more of it with more of it in 2021. Greg Feller, President, and CFO of Mogo said,

“We plan to initially allocate a modest portion of our capital toward bitcoin investments and will consider additional investments in bitcoin as we monetize some of our existing $17 million portfolios which we expect to begin doing in 2021.”

The company which is publicly traded on the NASDAQ and TSX believe it is “well-positioned to capitalize on the fast-growing demand for bitcoin.”

This isn’t the first time that Mogo has ventured into the cryptocurrency market. Back in 2018, it launched MogoCrypto to enable the buying and selling of Bitcoin in Canada. Recently, it also announced its bitcoin rewards program, an opportunity to earn BTC by engaging with Mogo’s products.

Earlier this month, the company reported a 135% month-over-month increase in the value of Bitcoin traded on its platform from Oct. to Nov. 2020. Feller said,

“We are strong believers in bitcoin as an asset class and believe this investment is consistent with our goal to make bitcoin investing available to all Canadians. In addition, we believe bitcoin represents an attractive investment for our shareholders with significant long-term potential as its adoption continues to grow globally.”

Mogo is just another addition to the long line of companies that have been making corporate investments in the world’s largest cryptocurrency.

MicroStrategy, Square, Ruffer Investment, and many others have jumped on the Bitcoin bandwagon along with the big names like Guggenheim, Paul Tudor Jones, Stanley Druckenmiller, Ben Miller becoming Bitcoiners.

“Most investment banks and private banks will announce crypto offerings,” and “several large public companies will issue BTC-related capital structure instruments,” predicts Su Zhu, CEO of Three Arrows Capital for 2021. He also sees several central banks announcing “substantial stakes in BTC.”

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Author: AnTy

Canada’s Largest Fund Group Partners with Galaxy Digital, Completes $72M IPO of a Bitcoin Fund

Amidst Bitcoin’s crazy rally, Canadian mutual fund manager CI Financial Corp. raised $72 million in an initial public offering of a Bitcoin fund.

Founded in 1965, CI Financial is Canada’s largest independent mutual-fund manager with C$215.6 billion in assets under management as of Nov. 30.

While Toronto-based CI Financial will be managing the fund, Mike Novogratz’s Galaxy Digital will be the sub-advisor and execute the Bitcoin trading on behalf of the fund. On this collaboration, Novogratz commented,

“Fuel to the fire. So excited to partner with Canada’s largest fund group.”

The IPO attracted interest from a wide range of investors, including individuals, institutions, high-net-worth investors, and financial advisers.

Each share of the CI galaxy Bitcoin Fund was sold at C$12.88 ($10). It will be listed on the Toronto Stock Exchange to trade in U.S. and Canadian dollars.

The fund enables the company’s clients to hold the largest cryptocurrency through existing investment channels without going on new platforms. CI Financial Chief Executive Officer Kurt MacAlpine in an interview said,

“Having a product that can be bought directly — it can be bought through their financial adviser on behalf of them — it just makes their life a lot simpler than having to address their desire for Bitcoin via different structures and wallets.”

The closed-end fund will invest directly in Bitcoin, which will be held in segregated cold storage.

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Author: AnTy

Australian Crypto Payments Service Provider, Banxa, Set to Go Public in Canada

Banxa, an Australian based fiat-crypto payments service provider, is set to list on the Canadian Stock Exchange this December. The shares of this crypto startup will begin trading on the Canadian VC marketplace dubbed ‘TSX Venture Exchange,’ an ecosystem run by TMX Group, which is also in charge of the Toronto Stock Exchange.

According to the initial reporting by a local Financial Review Street talk section, Banxa will be listed on TSX Venture Exchange with an estimated market cap of $50 million. Notably, the firm had already received a green light from Canadian authorities to debut within this jurisdiction. Banxa touted the listing as the first of its kind for a crypto payments provider. Domenic Carosa, the founder and Chairman of Banxa, informed the publication that,

“Our TSX listing will make Banxa the first crypto Payment Service Provider (PSP) to be listed in the world, bringing well-needed transparency and governance to the crypto sector.”

The Aussie crypto startup has been operational for around six years and now enjoys the backing of heavyweights, including OKGroup, Alium Capital, and Alex Waislitz’s Thorney. Some of its clients include prominent exchanges and digital wallet providers like Shapeshift, Abra, Kucoin, OKEx, and Binance. Banxa has raised around $5 million pre-IPO, holding its series A funding earlier in the year.

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Author: Edwin Munyui

3iQ’s Ether Fund is Now Trading on Toronto Stock Exchange; The First ETH-Based ETF

On Thursday, the Canadian investment fund manager announced that 3iQ’s Ether Fund had completed its initial public offering (IPO) of 7,240,000 shares for $76.5 million. It has started trading on the Toronto Stock Exchange under the symbol QETH.U.

The trading started a couple of hours late due to a delay in closing the IPO prospectus. On resumption, the fund recorded a high of $11.48 and a low of $10.80 before ending the day at $11.02, with 345,331 shares traded across the day.

The Fund provides its holders’ exposure to the second-largest digital currency and an opportunity for “long-term capital appreciation.” Tyler Winklevoss, the co-founder and CEO of crypto exchange Gemini which will provide its custody services to the company, tweeted,

“Huge news for Ethereans. The Ether Fund by @3iq_corp will list on the Toronto Stock Exchange ($QETH).”

Ether’s price has been choppy for the past few weeks, going down to $535 today.

However, as we reported, institutional investors have been taking this dip as an opportunity to scoop more and more ETH through Grayscale’s ETHE product.

While nearly 3 million ETH are locked in ETHE, more than 1% of ETH’s circulating supply is deposited in ETH 2.0, and 6.1% of it is locked in DeFi protocols.

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Author: AnTy

Algorand Blockchain Adds Canadian Dollar Backed Stablecoin, QCAD, On Its Platform

Algorand blockchain welcomes its third stablecoin, QCAD, the Canadian dollar stablecoin built, issued, and managed by Stablecorp, a Canadian based fintech firm founded in a joint partnership with 3iQ, Canada’s largest crypto asset manager, and Mavennet Systems, a blockchain development firm.

In a press release statement on Thursday, Stablecorp Inc, a Canadian dollar stablecoin issuer, announced its partnership with Algorand to launch its digital asset on the latter’s blockchain. Algorand offers decentralized applications and projects a secure, scalable, and decentralized network that Stablecorp aims to leverage by launching QCAD on top of the blockchain. Algorand Foundation also released a grant to Stablecorp to incentivize the development of the stablecoins capabilities atop Algorand.

Jean Deagagne, CEO of Stablecorp, is looking forward to leveraging Algorand’s “robust and secure high throughput infrastructure” upon integrating QCAD stablecoin, he said in a statement. Furthermore, Algorand’s unique capabilities aim to expand the use cases of QCAD to spark mass adoption of the asset and “explore and scale new enterprise and consumer implementations,” he added.

According to the statement, the QCAD project is the first fully-regulated and mass-market stablecoin, “currently supported by over 22 different ecosystem partners, including exchanges, custodians, payment providers, and decentralized exchanges (DEXes)”.

Apart from providing a secure and robust platform for the stablecoin, Algorand also allows microtransactions, instant confirmation times, and wallet support for the token. Algorand testnet recorded over 1000 transactions per second, way faster than Bitcoin or Ethereum transaction times – at 7TPS and 15TPS, respectively. Sean Lee, the CEO of Algorand Foundation, said in a statement to BEG,

“The global scale and speed of the Algorand protocol will enable the high transaction volumes that will facilitate new and innovative consumer innovation using QCAD.”

QCAD becomes the third stablecoin built atop Algorand blockchain following the additions of dollar-backed Tether (USDT) and Circle’s USDC stablecoin. As a high throughput blockchain, Algorand opens up the use of high volume stablecoins on its unique globally scalable, secure, and instant platform.

The Canadian government has also been on its feet monitoring digital currencies, the benefits and flaws of launching a CBDC, and the role of blockchain systems in the economy. Recently, Canada announced plans to team up with other G7 countries to launch the CBDC, calling for more global cooperation between nations.

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Author: Lujan Odera

SEC Proposes $5 Million Settlement in Kik’s $100 Million ICO for KIN

Kik Interactive, the embattled Canadian messaging startup, seems to have finally reached a settlement deal with the SEC regarding its illegal ICO back in 2017. Since the summer of 2019, the two parties in court have gone back and forth, with the latest ruling by a New York judge, favoring the SEC.

With barely three weeks since the ruling, the SEC has now proposed that Kik should settle with a fine of $5 million with the market watchdog. Kik’s ICO had raised a total of $100 million, intended for a crypto network dubbed ‘KIN.’ This was, however, cut short by the SEC, which sought to pursue Kik on account of issuing an illegal security.

According to the SEC’s court document, the two parties have agreed on a proposed judgment and are now seeking the court’s approval. Other than the $5 million in penalties, Kik will be required to give a 45-day notice if they want to launch another Kin token sale. The document states,

“The proposed Final Judgment, if approved by the Court, would permanently enjoin Kik from committing future violations of Section 5, according to Section 20(b) of the Securities Act of 1933, 15 U.S.C. § 77t(b); impose a conduct-based injunction, as outlined in the proposed Final Judgment, under Section 21(d)(5) of the Securities Exchange Act of 1934, 15 U.S.C. § 78u(d)(5); and require Kik to pay a penalty of $5 million, under Section 20(d) of the Securities Act, 15 U.S.C. § 77t(d). The proposed Final Judgment would conclude this action.”

Unlike Telegram, which had a similar encounter with the SEC, Kik has not been obliged to return its investors’ funds. This means that the project’s tokenization dreams could be realized despite the SEC’s 16-month long legal battle. Notably, Kik has previously argued that its Kin token was sold based on its underlying utility instead of a speculative nature suggested by the SEC.

If the court approved the proposed judgment, Kik would only settle for $5 million; this amount is equivalent to what they collected during their fundraising initiative dubbed ‘Defend Crypto’ Campaign. Other ‘illegal’ ICOs like EOS and Telegram have had it a bit rougher, with each settling at $24 million and $18 million, respectively.

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Author: Edwin Munyui

Canadian Tech Startup Sues ConsenSys For Stealing Payment Coding; Lawsuit is Fabricated

Canadian tech startup, BlockCrushr, is taking Ethereum developer, ConsenSys, to court over the stolen intellectual property of a payment solution. The plaintiff claims ConsenSys stole its source code when they participated in a ConsenSys-sponsored hackathon to create a rival payment system to theirs.

In a filing to the Eastern District of New York Court, BlockCrushr claims ConsenSys broke trust as an investor by stealing trade secrets and launching a rival version of their recurring payments platform, a day before they began.

The link between the two companies started in 2020 when BlockCrushr participated in ConsenSys’ Tachyon Accelerator Program. ConsenSys had also invested $100,000 into the company, but the founders of the company believe the mentor was simply playing them to steal their trade secrets.

BlockCrushr claims it shared a “detailed every aspect of its marketing, financial, technical, and regulatory strategy” to ConsenSys during the Accelerator program. Furthermore, the filing states they shared over 120,000 lines of source code of their recurring payments platform to gain guidance.

The complaint states that following the Accelerator program, ConsenSys would invest and guide the company forward, but no funding came. Due to cash strains and lack of funding, BlockCrushr’s founders Andrew Redden and Scott Burke, claim they had to lay off employees to streamline funding.

After securing a new round of funding, BlockCrushr moved to launch to market but were beaten to it by ConsenSy’s new recurring payments platform, “Daisy Payments,” which began on August 22nd, 2019, a day before their slated product launch.

TheBlock was able to get a comment from the ConsenSys legal counsel team who claim the story by BlockCrushr is fabricated and false but declined to comment before the court hearing.

The Canadian tech startup is now suing ConsenSys for damages caused by misappropriation of trade secrets and a breach of contract.

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Author: Lujan Odera

Crypto Asset Broker, Voyager Digital, Reports An Impressive 1,159% YoY Revenue Jump

  • Voyager Digital Limited, a licensed Canadian crypto-asset broker, announced a preliminary unaudited revenue figure of $1.1 million after a sharp growth through the fiscal year ending June 30th, 2020.
  • The strong revenue growth is greatly attributed to a strong Q4 where the revenues grew 701% year-on-year to $700,000.

The preliminary report, released by Voyager, showed that the unaudited revenues by the firm jumped an impressive 1,159% over the year to $1.1 million. The company registered over 230,000 customers in the past fiscal year as the brokerage accounts increased 750% year-on-year to 86,000 accounts.

The results show exceptional performance in the operational and financial milestones set by the firm. Stephen Ehrlich, CEO, and Co-founder of the brokerage firm said the company had increased its customers’ assets by 1,959% to $35 million, and the principal value traded grew to $165 million, representing a 725% YoY growth. Ehrlich said,

“Our exceptional business momentum carried over into the fourth quarter, where we saw strong revenue growth both sequentially and year-over-year. […] These results reflect our evolution this past year into a fully integrated digital asset agency broker.”

The rapid growth in Voyager follows a rapid expansion in its business capabilities, including the addition of 39 crypto assets on its platform, including XRP, Compound (COMP), Kyber Network (KNC), Multi-Collateral Dai (DAI) and Celo (CELO) among others.

Over the past fiscal year, the company has completed several partnerships and acquisitions, including Avant-Garde and Circle’s crypto investing app.

Read more: Voyager Raises $2.1 Million in Private Placement to Expand User Base

In the remaining part of 2020 (first half of 2021 fiscal year), Voyager aims at integrating USDC stablecoin as one of the assets, obtain a BitLicense from the New York State Department of Financial Services (NYSDFS) and extend their interest program to other assets.

“Looking ahead, we continue to take steps to strengthen the Voyager Platform, and grow both our retail and institutional customer base,” Ehrlich added.

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Author: Lujan Odera