Canada

The Ontario Securities Commission (OSC) is cracking down on unlicensed companies promoting investments and trading in cryptocurrencies.

The authority issued an investor alert on May 18, warning the public about five companies: BTCReal, BitSerial, Hypercube Ventures LP, CabinCoin OÜ, and BaapPay Inc., which it said “appeared to be involved in schemes that target Ontario investors and encourage them to trade or invest in cryptocurrencies.” These have not provided a prospectus, as required, or received an exemption.

The crackdown on the five companies followed several complains from customer and would-be investors, the OSC said, and comes at a time when regulators in North America are taking stern measures against cryptocurrency exchanges operators and token issuers.

Throughout the past few weeks, state and provincial regulators in the US and Canada have conducted a wide-ranging crackdown on initial coin offerings (ICOs) and cryptocurrency-related investment products.

This resulted in nearly 70 open investigations and 35 pending or completed enforcement actions, but according to Joseph P. Borg, president of NASAA and director of the Alabama Securities Commission, the results “are just the tip of the iceberg.”

The coordinated action plan, dubbed “Operation Cryptosweep,” involved members of the North American Securities Administrators Association (NASAA) from more than 40 jurisdictions. The regulators said they were currently conducting additional investigations into potential fraudulent conduct that may result in additional enforcement actions.

“The persistently expanding exploitation of the crypto ecosystem by fraudsters is a significant threat to Main Street investors in the US and Canada, and NASAA members are committed to combating this threat,” said Borg.

Despite a series of public warnings from securities regulators at all levels of government, cryptocriminals need to know that state and provincial securities regulators are taking swift and effective action to protect investors from their schemes and scams.

Borg noted that not all ICOs or cryptocurrency-related investments were fraudulent but urged investors to approach these with extreme caution.

ICOs raised more than US$5 billion in 2017 but 2018 promises to be even more remarkable. Token sales raised more money in the first quarter of 2018 than the whole year 2017.