The British Columbia Securities Commission (BCSC), one of the thirteen provincial financial regulators in Canada, has added Canada Bitcoin Exchange Inc. (CBE), which facilitates trading in digital currencies, to its ever-growing Investment Caution List.
The BCSC says CBE’s website claims to offer four investment plans, with returns ranging from 3,586 percent to 7,985 percent after 24 to 48 hours, which raises a red flag as far as investors are concerned.
As one would expect, sites such as Canada Bitcoin operate as an HYIP scheme where returns are always dodgy, though they tend to dry up well before the original investment amount is repaid. The company provides no legitimate proof of payouts, and it is likely no one will ever see any money.
The regulator has, therefore, urged investors to use caution when dealing with this brand.
A glance at the website in question also reveals that the exchange does not confirm licenses held in any jurisdictions either.
After briefly explaining certain risks related to Cryptocurrencies , the provincial authority noted that, while some trading activities are regulated, these represent only a portion of the market, while a large portion is illegally traded through unregulated online platforms.
NASAA Coordinates Crackdown on Crypto
Confronted with Canada’s watchdogs intensifying scrutiny of crypto ICOs, many startups are moving their businesses to locations more welcoming such as Malta, Switzerland and Eastern Europe.
Dozens of entrepreneurs have already flocked to Zug, an affluent municipality in Switzerland, which hosted last year most of largest ICOs, raising a total of over $700 million.
As part of the crackdown, more than 40 state and provincial securities regulators in the US and Canada issued a series of consumer alerts to raise public awareness and urge caution when investing in token sales. In addition, nearly 70 inquiries and 35 ICO-related enforcement actions have been announced during the last three months.
The North American Securities Administrators Association (NASAA) is also conducting public outreach initiatives to warn investors in their jurisdictions of the risks associated with ICOs and cryptocurrencies.
Earlier last year, NASAA organized a task force to launch investigations into ICOs and cryptocurrency-related investment products. Those investigations have resulted in the enforcement actions against hundreds of initial coin offerings.
NASAA’s task force also found more than 30,000 crypto-related domain name registrations, the vast majority of which appeared in 2017 and 2018.
