The Ontario Securities Commission (OSC) accuses the Canadian cryptocurrency exchange Coinsquare of fictitious trading and artificially increasing volumes.
The OSC said in a statement that Coinsquare CEO Cole Diamond, founder Virgile Rostand and Compliance Officer Felix Mazer deliberately manipulated markets with fake trading volumes and ordered firm employees to illegal actions.
Diamond oversaw the staff, while Rostand designed and implemented the code to carry out fictitious trading, the statement said. Mather served as Director of Compliance from May 2018 to June 2020, but he “did not take steps that a reasonable person in that position would take,” the Commission said.
The regulator says fictitious trades accounted for 90% of Coinsquare's total trading volume between July 2018 and December 2019. The statement also states that between July 17, 2018 and December 4, 2019, about 840,000 fictitious trades for 590,000 BTC were conducted on the platform.
When Coinsquare found out that one employee had been informing the regulator about the violations, he was harassed by the company's management. The alleged violation occurred when Coinsquare approached OSC with a request to register a subsidiary of Coinsquare Capital Markets Ltd. During this time, the platform concealed fraudulent activities from OSC staff.
The OSC's statement came following a Vice post last month claiming Coinsquare was engaged in fictitious trading. This information was based on emails, Slack messages and other data received by the publication.
OSC will conduct a hearing to determine if it is in the public interest to approve the settlement agreement between OSC and Coinsquare. The hearing will take place on July 21, 2020 at 22:30 Moscow time.