Bitcoin Mining Company Fights Charges of Securities Violations

A Saskatchewan, Canada-based Bitcoin Bitcoin While some may still be wondering what is Bitcoin, who created Bitcoin, or how does Bitcoin work, one thing is certain: Bitcoin has changed the world.No one can remain indifferent to this revolutionary, decentralized, digital asset nor to its blockchain technology.In fact, we’ve gone a long way ever since a Florida resident Laszlo Hanyecz made BTC’s first official commercial transaction with a real company by trading 10,000 Bitcoins for 2 pizzas at his local Papa John’s.One could now argue that While some may still be wondering what is Bitcoin, who created Bitcoin, or how does Bitcoin work, one thing is certain: Bitcoin has changed the world.No one can remain indifferent to this revolutionary, decentralized, digital asset nor to its blockchain technology.In fact, we’ve gone a long way ever since a Florida resident Laszlo Hanyecz made BTC’s first official commercial transaction with a real company by trading 10,000 Bitcoins for 2 pizzas at his local Papa John’s.One could now argue that Read this Term mining company, Dominion Bitcoin Mining Company Ltd., has fought back against charges of violating securities laws.

The case has been dragging on for over a year. The Financial and Consumer Affairs Authority (FCAA) of Saskatchewan, the province's financial regulator, first issued a temporary Cease Trade Order to Dominion on May 1, 2014.

The FCAA alleges that the company publicly advertised the sale of securities on its website without registering with the Authority. In addition, no prospectus was filed and misleading statements were allegedly made.

Whereas recent cases in the U.S. between regulators (SEC, CFTC CFTC The 1974 Commodity Exchange Act (CEA) in the United States created the Commodity Futures Trading Commission (CFTC). The Commission protects and regulates market activities against manipulation, fraud, and abuse trade practices and promotes fairness in futures contracts. The CEA also included the Sad-Johnson Agreement, which defined the authority and responsibilities for the monitoring of financial contracts between the Commodity Futures Trading Commission and the Securities and Exchange Commiss The 1974 Commodity Exchange Act (CEA) in the United States created the Commodity Futures Trading Commission (CFTC). The Commission protects and regulates market activities against manipulation, fraud, and abuse trade practices and promotes fairness in futures contracts. The CEA also included the Sad-Johnson Agreement, which defined the authority and responsibilities for the monitoring of financial contracts between the Commodity Futures Trading Commission and the Securities and Exchange Commiss Read this Term) and Bitcoin companies have been settled without much of a fuss, this one is just getting started. The FCAA has not penalized Dominion or its directors, its only request being the cessation of the securities marketing.

One of the core issues is whether Dominion was in fact actively soliciting shareholders. As reported by Regina Leader-Post, one page of Dominion's site stated, "if you are a sophisticated investor, please feel free to peruse the rest of the site. Learn about bitcoins and learn how to share in the proceeds." Other pages referred to 10 corporations that contract with Dominion, stating "by taking part in our offering, you own a share in one of the ten provincial companies."

Jason Dearborn, one of the company's officials, said the accusations are "spurious". The lawyer representing Dominion argues that the regulator peeked at "a chalkboard in a locked room", "picking the lock" on a draft version of an encrypted website that wasn't publicly accessible. Thus, he argues, the FCAA is regulating "thought crimes", as no investors were actually solicited.

An FCAA investigator countered that he "only had access to what was publicly available" when he accessed the site in April 2014. The site is currently not publicly viewable.

The original Cease Trade Order in fact expired in September. At the time, Dominion president Peter Voldeng said the charges were unfounded and based on ignorance. "They have absolutely no idea what bitcoin is. It may have been that they thought bitcoin was a security that they could regulate," he told CBC News.

The FCAA, however, reissued the order with new charges shortly thereafter. In March this year, Dearborn sought an administrative penalty of $100,000 against the FCAA.

Much of Wednesday's hearing was in fact consumed by wrangling over procedural issues and legal technicalities. Dominion charged that evidence gathered is inadmissible, arguing that it was illegally obtained, and took issue with the hearing even proceeding. Other matters of contention included a secret informant, whether a proper witness list had been provided and constitutional challenges.