The financial regulator of Canada accused Coinsquare of manipulating the market by winding up the trading volume by a total of 590,000 bitcoins.

The Ontario Securities Commission (OSC) launched a lawsuit against cryptocurrency exchange Coinsquare and its executives. According to the accusations voiced by the employees of the OSC's Rights Protection Department during the court hearing on July 16, from July 17, 2018 to December 4, 2019, the crypto exchange conducted 840,000 fake transactions worth about 590,000 BTC. That is 90% of the total trading volume of the exchange. The defendants in the case are CEO Cole Diamond, President and founder Virgile Rostand, and Chief Compliance Officer Felix Mazer.

Coinsquare is a Toronto-based cryptocurrency trading platform launched in late 2014. As of December 14, 2019, it had approximately 235,000 client accounts. The exchange did not apply for registration with the OSC.

OSC claims that Coinsquare was involved in manipulating the market by reporting inflated trade volumes, misleading its clients about trading volumes, and attempting to crack down on an employee whistle-blower.

At the direction of the CEO, Rostand created an algorithm, which was implemented on July 17, 2018, “to inflate the trading volumes reported on the Coinsquare Platform (the Market Volume Function).”

The employee, who acted as a whistleblower for the Canadian regulator, was hired by Coinsquare in November 2018, but was fired in December 2019 after he repeatedly told the top executives of the exchange that they should not practice wash trading.