Coinsquare CEO resigns after admitting company manipulated crypto exchanges

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Posted on: July 24, 2020 8:32 pm EDT

The cryptocurrency company has come under fire in Canada for not playing by the rules

A recent scandal involving a Canadian cryptocurrency company resulted in the resignation of both the company’s CEO and its founder and president. The Ontario Securities Commission (OSC) accused Coinsquare Ltd. of misleading investors and manipulating the market in their favor, and now both parties have worked out a settlement agreement. Both CEO Cole Diamond and president and founder Virgile Rostand are stepping aside from the Toronto-based company as part of the agreement.

Coinsquare, a company that creates tools for people to access digital currency markets, admitted to having inflated by 90% its trading volumes from July 2018 to December 2019 by adding fake trades, according to the OSC. By adding trades that never really happened, the company was able to influence its presence in the crypto market. In addition to resigning their positions, the settlement includes the payment of the investigation costs the OSC incurred, as well as $1 million and $900,000 fines for Diamond and Rostand, respectively. Finally, the company is required to create an independent board of directors to supervise.

For OSC’s director of enforcement, Jeff Kehoe, this is an important milestone, as this is the first time that a cryptocurrency company has been brought to justice under the 2016 laws barring reprisal against a whistleblower.

According to what a Coinsquare spokesperson said to The Canadian Press, its actions were influenced by wrong legal advice. It added that, despite that market manipulation, the company always put the clients, employees and shareholders interests first, and that increased trading volume did not have an impact on cryptocurrency prices.