The Ontario Securities Commission (OSC) announced this month it had participated with over 40 North American Securities regulators in Operation Cryptosweep, in a coordinated effort to take down fraudulent cryptocurrency schemes.
Since its launch at the beginning of May, Cryptosweep resulted in nearly 70 inquiries and investigations, and 35 pending or completed enforcement actions regarding initial coin offerings (ICOs) or cryptocurrencies, according to the North American Securities Administrators Association (NASAA).
As a result, the OSC has issued warnings regarding five firms that are targeting investors in Ontario but are not registered to trade in securities in that province: Brera, BitSerial, Hypercube Ventures LP, CabinCoin OÜ, and BaapPay Inc. The regulator also issued a separate warning regarding BitConnect, which is also not registered to trade in securities in the province of Ontario. Other regulators have also taken action regarding BitConnect.
In January 2018, the Texas State Securities Board issued an emergency cease and desist order against BitConnect, while the New Brunswick Financial and Consumer Services Commission published an investment alert regarding this entity.
Meanwhile, the British Columbia Securities Commission (BCSC) issued letters to 12 offshore companies advertising ICOs in B.C., asking that they cease activities in the province until they become compliant with securities legislation.
The OSC advises that investors should consider the risks associated with investing in cryptocurrencies and be aware that the marketing of high returns is often an indication of investment fraud. It asks anyone who has dealt with any of the above companies to contact them.
For more information, please call Barbara Hendrickson at BAX Securities Law (416) 601 -1004.
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