Coinsquare CEO Resigns amid Accusations of Wash Trading
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July 22, 2020
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Cole Diamond, the CEO of a Canadian popular cryptocurrency exchange Coinsquare, and president Virgile Rostand will resign from their positions and pay the fine of $1 million and $900,000, respectively amid accusations of wash trading, the Ontario Securities Commission (OSC) has announced.

According to a document, Rostand and Diamond are prohibited from acting as registrants and directors for three years.

Rostand and Diamond will also pay $300,000 toward the costs of the regulator's investigation efforts.

Chief Compliance Officer at Coinsquare Felix Mazer has also left from the company and agreed to pay $50,000. He is also banned from acting as a director or officer of a registrant for one year.

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The document also says the exchange and its subsidiary seeking registration with the OSC (Coinsquare Capital Markets Ltd.) must implement "substantial corporate governance improvements."

Director of the Enforcement Branch at the OSC, Jeff Kehoe, says Coinsquare not only stuck with the practice, but lied to investors about it and retaliated against a whistleblower.

"Being an innovator in our capital markets is not a free pass to disregard Ontario securities law. All market participants – including those in novel industries – must act honestly and responsibly," Kehoe added.

Previously, the OSC accused the Canadian crypto trading platform of inflating its trading volumes.

According to the regulator, the exchange inflated its trading volumes, a technique known as wash trading, in order to manipulate the market.

In June, Canada amended its regulation, so that all crypto companies are considered as money services businesses. The amendments to the current legislation were first published by the Canadian government back in July last year.

Bank of Canada: CBDC Should be as Accessible as Cash

From now on, crypto companies offering services to Canadian residents must comply with the requirements of the Financial Transactions and Reports Analysis Centre of Canada (FINTRAC) and register with the agency. Cryptocurrency exchanges and money transfers are also subject to the new regulation.

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