Canadian Exchange Coinsquare Accused of ‘Wash Trading’ by Ontario Securities Commission

Canadian financial watchdog, Ontario Securities Commission (OSC), is accusing Coinsquare crypto exchange of market malpractices with a hearing on this case set for July 21. According to the OSC, CoinSquare took part in market manipulation activities by giving a false picture of trading volumes to its clients'.

The regulator goes on to detail that CoinSquare engaged in what is dubbed as ‘wash trading' in the financial markets' scene. This activity involves the creation of false large in-house orders to manipulate trading volumes while, in reality, no assets change hands. OSC has since put Coinsqaure's CEO Cole Diamond, founder Virgile Rostand, and CCO Felix Mazer to the task and are set to appear as respondents in the case.

In its filing, the OSC says that Diamond instructed Rostand to mess with trading volumes in early 2018. It was then that the Coinsquare founder came up with a solution, pegging the fundamentals on wash trading. Consequently, the exchange carried out over 840,000 wash trades, which saw 590,000 BTC change hands between mid-2018 and December 2019. Notably, this was over 90% of the exchange's volume at the time.

The OSC further highlights that Coinsquare took no action despite concerns from staff during this period. In fact, at one time, the regulator asked for Coinsquare's financial records and the firm failed to report any irregular activity citing that it is,

“taking steps to prevent market manipulation and highlighted controls it claimed could help detect such conduct.”

Also, the CoinSquare Exchange is said to have terminated one of the whistleblowers after it emerged that OSC had tabs on them. Coinsquare has since maintained that it did not engage in market manipulation.

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Edwin Munyui
Edwin Munyui
Edwin is a FinTech enthusiast with a particular interest in blockchain technology and cryptocurrencies. He has worked as an author in the blockchain space since 2017 and enjoys creating content that both crypto veterans and newbies can understand. His simple writing style and financial market knowledge have made him a reputable fundamental and technical analyst with the ability to handle any topic around blockchain and crypto over the years.

[Alert] Use the author's self-conducted information at your own risk, do you own research, never invest more than you are willing to lose.

[Disclosure] The published news and content on BitcoinExchangeGuide should never be used or taken as financial investment advice. Understand trading cryptocurrencies is a very high-risk activity which can result in significant losses. Editorial Policy \\ Investment Disclaimer


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