OSC continues to hold non-compliant crypto asset trading platforms accountable

TORONTO – The Ontario Securities Commission (OSC) today issued a Statement of Allegations against Phemex Limited and Phemex Technology Pte. Ltd. (Phemex) for failing to comply with Ontario securities law.

The OSC alleges that, from November 25, 2019 to January 6, 2023, the foreign incorporated Phemex entities operated an unregistered crypto asset trading platform and allowed Ontario residents to trade crypto asset products that are securities and derivatives.

As alleged, Phemex’s failure to comply with the registration and prospectus requirements under Ontario securities law has deprived investors of essential protections and undermined confidence in the fairness and efficiency of Ontario’s capital markets.

This enforcement action is part of the Canadian Securities Administrators (CSA)’s ongoing, coordinated effort to ensure that crypto asset trading platforms comply with securities legislation in Canada. Regardless of the location of their operations, platforms that facilitate the buying and selling of crypto assets by Canadian investors must comply with applicable requirements under Canadian securities legislation.

The OSC will continue to take action against non-compliant crypto asset trading platforms and is in contact with international securities regulators to exchange information to support enforcement action.

The OSC acknowledges the assistance of the British Virgin Islands Financial Services Commission and the Monetary Authority of Singapore.

The OSC urges investors always to check the registration of any person or business trying to sell them an investment or give them investment advice. Before investing in crypto assets, investors should also consult the list of platforms that are registered with Canadian securities regulators.

The OSC also continues to add unregistered crypto asset trading platforms to its Investor Warning List.

The mandate of the OSC is to provide protection to investors from unfair, improper or fraudulent practices, to foster fair and efficient capital markets and confidence in the capital markets, and to contribute to the stability of the financial system and the reduction of systemic risk. Investors are urged to check the registration of any persons or company offering an investment opportunity and to review the OSC investor materials available at http://www.osc.ca.

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