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09/07/24
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Canada Finds LiquiTrade Guilty of Illegal Operations
LiquiTrade has been found guilty of operating an illicit exchange in Canada after investigations were carried out by a panel established by the British Columbia Securities Commission (BCSC).
Two years ago, it was alleged that LiquiTrade operates a crypto trading platform known as Latoken, accessible to residents of British Columbia and trades in derivatives without registration.
Latoken allows trading of cryptocurrency assets as well as, in certain circumstances, fiat assets like EUR and USD. However, “LiquiTrade has never been registered in any capacity under the Act, and there is no recognized exchange or clearing agency in British Columbia operated by LiquiTrade or using the name LATOKEN.”
It was discovered that users’ funds are stored in the online (or “hot”) accounts accessible by users, despite advertising that “99.5% of funds are kept in cold storage with multisignature technology”.
LiquiTrade claims recording over $300 million daily turnover and over 1,500,000 registered traders as of around March 6, 2022, as well as over 2.5 million “registered users coming from countries with high growth potential” and over 2 million registered accounts as of two years ago.
The platform posts on the social media platforms Facebook and X to promote its services and they are accessible to residents of British Columbia. Latoken claims to be a “high-profile, trusted and regulated exchange”, regulated by the EU and in the list of top-40 most trusted exchange.
Its marketing materials reference political and financial figures, claiming alignment with world leaders, displaying photographs of former presidents of Mexico and Bulgaria, as well as the former chairman of the American Commodity Futures Trading Commission.
The court filing shows that the sanctions on the platform will be finalized by August 14. Sanctions may include monetary penalties and prohibition of services. As of four months ago, four cryptocurrency exchanges have been banned in the country, including Catalyx, KuCoin, Poloniex and xt.com exchanges.
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