Coinsquare Ltd. CEO Cole Diamond will step down after securities regulators accused the cryptocurrency company of misleading investors and manipulating the market.
Founder and president Virgile Rostand will also step aside from the Toronto-based company, which creates tools for people to access digital currency markets, as part of the settlement agreement approved on Tuesday by the Ontario Securities Commission.
The company inflated 90 per cent of its trading volumes between July 2018 and December 2019 with fake trades, according to the settlement agreement from the OSC.
In addition to paying costs for the OSC investigation, Diamond and Rostand will pay fines of $1 million and $900,000, respectively, and the company will be required to create an independent board of directors.
Jeff Kehoe, the OSC’s director of enforcement, says the settlement is also an important milestone as it marks the first time a company has been disciplined under 2016 laws barring reprisal against a whistleblower.
A company spokesperson for Coinsquare told The Canadian Press that the company acted on wrong legal advice but the company put clients, employees and shareholders first, and that the increased volume did not impact cryptocurrency prices.