July 25, 2019
CoinLaunch Corp., a cryptocurrency consulting firm, has agreed to pay approximately $50,000 as part of a settlement with the Ontario Securities Commission (OSC) over allegations that the firm engaged in the unregistered trading of securities, according to an article in The Globe and Mail. In her article, author Alexandra Posadzki examines the background to the CoinLaunch settlement, which also prevents the firm from trading in securities and derivatives for five years. The article explores how this is the latest example in a series of enforcement actions by the OSC in the midst of the increasing popularity of virtual currencies. Evan Thomas, a Counsel in Osler’s Litigation Group and an expert in blockchain and cryptocurrencies, explains the CoinLaunch settlement.
“The key here is that CoinLaunch’s marketing program, taken as a whole, was instrumental in soliciting investors to buy these tokens, and that’s how CoinLaunch’s conduct came within the definition of ‘trading,’” Evan tells The Globe and Mail.
Evan adds that there have been “only a handful of instances where securities regulators in North America have gone after crypto consulting firms or companies engaged in cryptocurrency trading or promotion.”
He says that as a result, “the lack of similar cases seems to have helped CoinLaunch in terms of reducing the penalty. As the reasons note, ‘We find that the administrative penalty is within a reasonable range in light of the limited history of penalties for non-registration cases involving cryptoassets.”
If you subscribe to The Globe and Mail online, read author Alexandra Posadzki’s article “Cryptocurrency consulting firm CoinLaunch Corp. agrees to settlement with OSC,” on July 25, 2019.