Canada’s securities commission-based in Ontario officially accused Coinsquare of market manipulation and wash trading, as we are reading more in the latest crypto news.
Canada’s Securities Commission accused the exchange Coinsquare of market manipulation and misleading the investors about the real trading volumes. The OSC alleged Coinsquare which was accused of wash trading and the reports of a hack, had “engaged in conduct contrary to the Ontario Security laws” as the regulator named the founder of the exchange Virgile Rostand and the CEO Cole Diamond as respondents.
In the complaint, the regulator said Diamon directed Rostand to start inflating the trading numbers in 2018, and then Rostand came up with a new idea that allowed the exchange to begin “wash trading.” This method refers to artificially inflating the trading volumes by executing larger market traders into their own order so that it looks like bigger transactions occurred but there were no assets changing hands. Between 2018 and 2019, Coinsquare did about 850,000 wash trades with a value of $590,000 Bitcoins, representing 90% of the trading volume on the exchange.
Despite the concerns from staff, Coinsquare continued the wash trading activities and manipulated the market along with the traders. The regulator requested more information on the trading activity of the exchange but Coinsquare didn’t report any irregularities and said that they are “Taking steps to prevent market manipulation and highlighted the control it claimed could help detect such conduct.” The regulator also said that Coinsquare terminated the internal whistleblower after the employee raised concerns about wash trading.
As per the previous reports, Coinsquare, one of the largest crypto exchanges in Canada laid off nearly 40 people back in 2019 which are 30 percent of its staff including the chief financial officer (CFO) and the chief operating officer (COO). Martin Hauck-Coinsquare’s head of talent posted on LinkedIn that ‘’the ever-evolving digital currency space has been volatile and unpredictable’’ and this is one of the reasons that Coinsquare joined the multiple companies that were forced to make staff cuts. According to BetaKit, some of the highest-ranked employees such as COO Robert Mauller and CFO Ken Tsang have their contracts terminated after working for over a year.
After the layoffs, Coinsquare CEO Cole Diamond said that despite the fresh cuts the firm has planned a new team of 23 employees, 14 of which will be there because of the acquisition of the blockchain-based loyalty company Tipcoin.
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