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- Poloniex is about to be fined by OSC for not complying with investment rules in Canada
- It is the largest cryptocurrency exchange in the country. Accounts for the majority of investments taking place in Bitcoin and Ethereum
- 70 exchanges dealing in cryptocurrency plan to have a dialogue with the government
It’s now Canadian securities watchdog’s turn to fine a cryptocurrency exchange after a host of countries plan to regulate it in their own countries.
Poloniex, the largest cryptocurrency exchange in the country. It is about to be fined for trading securities for not registering with the Ontario Securities Commission. Moreover, they function against public interest and are detrimental to the financial health of the country. Several exchanges have shown their interest to carry out a dialogue with the government. For smooth functioning but Poloniex differed from the majority.
Crypto to be regulated in Canada
It was only in January 2021 that Bitcoin had a market capitalization of $1 trillion that doubled within 94 days. If experts are to be believed, the current market capitalization is much more than all Canadian mutual funds and ETF holdings combined. It is a highly volatile investment tool that has picked up pace in Canada. A hefty fine of $1 million placed in Poloniex for not obeying investment and trading rules.
Regulations might bring some sort of a change that will make investors more aware of what they are investing in. Policies and norms will benefit retail investors that have invested their hard earned money in cryptocurrencies like Bitcoin and Ethereum.
Unsophisticated investors’ money at risk
OSC had no other choice but to act strictly according to its own principles and also protect investor rights. A professor from Rotman School of Business, Andreas Park, pointed out the volatility in recent weeks where Bitcoin plunged to its February lows and continues to slide.
Crypto futures and options trading also makes it even more of a dangerous field for investors who are looking for long term gains.
Park also reiterated that investors do not actually hold cryptocurrency. It is the exchange that is the sole custodian of all the investments. If an exchange goes bankrupt or hacked by an external party, all the cryptocurrency gets lost.
It is imperative for investors to also build trust but no regulation will simply put their investments at risk. Regulations should be implemented as the scale of Bitcoin and other cryptocurrencies’ growth is massive and disruptive in nature.
Steve Anderson is an Australian crypto enthusiast. He is a specialist in management and trading for over 5 years. Steve has worked as a crypto trader, he loves learning about decentralisation, understanding the true potential of the blockchain.
