Bybit and KuCoin were hit with financial penalties by the Ontario Securities Commission

According to the OSC, "Bybit responded to the enforcement action taken by the OSC, maintained an open communication, provided the information required, and promised to participating in registration negotiations."

Bybit and KuCoin were hit with financial penalties by the Ontario Securities Commission, or OSC, for allegedly operating unregistered crypto asset trading platforms and violating securities regulations.

The Ontario regulator said in a statement on Wednesday that it had received orders prohibiting KuCoin from trading on the province's capital markets and fining the exchange more than $1.6 million.

The OSC also disclosed that Bybit agreed to pay $7,724 to cover the costs of its inquiry and disgorged almost $2.4 million as part of a settlement agreement.

However, only Bybit "responded to the OSC's enforcement action, maintained an open dialogue, provided required information, and pledged to participating in registration discussions." Both companies are accused of breaking Ontario securities rules.

According to OSC Director of Enforcement Jeff Kehoe, foreign crypto asset trading platforms who wish to conduct business in Ontario must adhere to the law.

The regulatory body's action was the most recent in a string of legal warnings and measures against cryptocurrency exchanges providing services to citizens of Ontario.

The OSC set a March 2021 deadline for cryptocurrency companies doing business in the province to register in accordance with securities law by April. If the company is unable to register, Bybit would "wrap up its Ontario operations," according to the regulator.

Hearings and other enforcement measures will begin in June 2021 as a result of both Bybit and Kucoin allegedly breaking the securities regulator's rules.

The OSC had already initiated regulatory actions against crypto exchanges Poloniex and OKX (formerly known as OKEx) for similar violations of securities laws.