The unregistered platform is based in the Cayman Islands
An unregistered and unauthorized cryptocurrency trading platform that has been operating in British Columbia has been banned by the provincial securities regulator.
LiquiTrade Ltd, an entity incorporated in the Cayman Island, has been prohibited from trading in or purchasing securities and derivatives on behalf of British Columbians, meaning it cannot legally operate in the province under its current model.
The British Columbia Securities Commission also ordered the firm to pay an administrative penalty of $500,000.
LiquiTrade’s LATOKEN platform has been operating since 2020 and does not allow investors to directly buy and sell cryptos, they trade contractual rights to crypto assets and those contractual rights are derivatives.
The firm, through its platform, created a derivatives trading market, promoted derivatives, and operated as an exchange, a BCSC panel determined in July 2024, even though it had no authorization to do so and was not registered in the province.
The firm added Canada to a list of countries from which new users were not accepted, following a BCSC hearing in November 2023 and an investigator later tried twice to open an account using a Canadian phone number and then an email address traceable to Vancouver. Although these attempts were unsuccessful, when a VCN was used to disguise their IP address, a crypto deposit address was obtained.
“LiquiTrade chose to work outside of important requirements which are designed to mitigate some risks faced by investors in this province,” the panel said, although it noted that the risk to investors was small and there was no evidence that any BC investors had lost funds from the firm’s misconduct.
The BCSC’s action against LiquiTrade is part of an ongoing, coordinated effort by Canadian securities regulators to ensure that crypto trading platforms comply with securities legislation in Canada.
