A Canadian securities regulator has banned the country’s first two registered digital forex exchanges from trading Tether (USDT). Seemingly printed at will and deeply associated with alleged market manipulation, the stablecoin is the only banned digital asset in the country to date.
The Ontario Securities Commission has historically been tough on digital currency operators. After the exchanges were given a deadline in April to license their operations, it has hit the whip on those who haven’t, from Poloniex to KuCoin, OKEx and Bybit.
Now it has its sights set on the world’s largest stablecoin, USDT.
The commission has banned Coinberry and Wealthsimple exchanges from offering tether trading services. The two are the first exchanges in Canada to receive an operating license that allows them to offer digital forex trading services in all Canadian provinces.
Coinberry received approval from the Canadian Securities Administrators (CSA) a week ago allowing it to “offer Canadians crypto-based products and services on a regulated platform.” It boasts of being the first pure exchange to be licensed in Canada. Wealthsimple got approval first, but unlike its peer, it doesn’t allow its users to withdraw their digital assets, much like Robinhood Crypto does.
Despite receiving regulatory approvals for Canadians, the two exchanges will not be able to offer USDT. The stablecoin was the only one listed under “Prohibited Crypto Assets”, with the regulator not offering any reasons for its decision.
The ban on Tether was justified, and here’s why
The USDT trade ban has been a long time coming, and the Ontario regulatory agency took a move many other larger watchdogs should be doing years ago.
Tether’s controversies and problems are endless. From market manipulation to shady and unchecked printing of tokens to connections to illegal outfits, the stablecoin has everything and a lot more.
Though he could have cited any of those reasons, the Ontario watchdog shied away, and a representative told a news agency, “We have no current plans to introduce any new platform-specific rules as platforms are already subject to existing requirements under the Canadian Securities Act.”
One Canadian attorney, however, was much more blunt, citing the endless litigation between Tether and its sister company Bitfinex as a key factor behind the Ontario ban.
Christine Duhaime stated, “With respect to Tether and Bitfinex, New York AG’s report has likely given no consolation to securities regulators and is likely to be viewed as risky in the eyes of a state regulator.”
The fintech attorney was referring to a lawsuit brought by Letitia James, the New York attorney general for Tether and Bitfinex, alleging that she suffered and covered up a loss of $ 850 million. AG James reached an agreement with the two earlier this year, demanding that they cease all activities in New York and pay nearly $ 20 million in fines.
Duhaime added, “Until some digital currency companies bind themselves to a jurisdiction with transparency and where digital currency holders have rights to exercise if something goes wrong, I suspect they are not allowed to operate in mature regulatory jurisdictions . “
At this point it is incomprehensible that Tether does not yet have to be held accountable for his actions. Granted, the US Department of Justice is reportedly investigating Tether executives for alleged bank fraud – what Tether boldly dismissed as “repackaging outdated claims as messages to generate clicks.”
However, despite the ongoing investigation, Tether is still trading on any other exchange and has the highest trading volume, more than the four largest digital currencies combined. After a short break, the company has also resumed its unchecked minting of new USDT tokens. Well over 4 billion USDT was printed in August.
As CoinGeek reported, not only is pressure an issue at Tether, but also the “small” question of where the new USDT is going. Insiders have revealed that an overwhelming majority of the newly minted tokens will go to Alameda Research and Cumberland, two market-making companies with questionable profiles, business partnerships and leadership.
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