An Ontario Securities Commission (OSC) panel has approved a settlement with CoinLaunch Corp. (CoinLaunch) which had formerly operated in the crypto-asset space, penalizing it for engaging in the business of trading in securities without a registration.

CoinLaunch, which ultimately chose to cease operations rather than seek registration, must pay an administrative penalty of CAD $30,000 and disgorge CAD $12,223.06. Reuven Cohen, CoinLaunch’s former CEO, has also agreed not to become or act as a director or officer of any company which engages in or holds itself out as engaging in trading securities, without the applicable registration or an exemption under Ontario securities law.

Between March and September 2018, CoinLaunch had advertised and provided services to issuers of crypto-asset tokens which included helping clients administer and promote crypto-asset token offerings. Taken together, these services constituted acts in furtherance of trades and required registration under Ontario securities law.

OSC staff note that upon becoming aware of its registration requirements, CoinLanch failed to make use of the supports the regulator had in place to foster Ontario’s emerging crypto-asset sector and that it additionally failed to seek registration or alternately, seek relief from the registration requirements. However, OSC staff also note that during the investigation CoinLaunch cooperated and took steps to remediate its conduct, including shutting down websites, ceasing business operations with token issuers, and ultimately closing its doors.

The settlement agreement between the OSC and CoinLanch is available for download from the website of the OSC.

For more information, please call Barbara Hendrickson at BAX Securities Law (416) 601-1004.

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