The Canadian Securities Administrators cautions that deceptive regulatory and dispute resolution organizations are being employed to create an illusion of legitimacy for certain crypto providers. Canadians are urged to verify the authenticity of crypto trading service platforms, as these entities might be utilizing fabricated regulatory bodies to enhance their credibility.
The Canadian Securities Administrators’ Investor Alert on June 20 highlights that certain crypto platforms are falsely asserting approval from regulatory authorities and dispute resolution organizations to give the impression of legitimacy. The CSA stated that these websites initially appear trustworthy, featuring information about complaint handling, dispute resolution, and compensating affected investors.
The CSA has identified several regulatory bodies and organizations, such as the Financial Standard Commission FSC Canada, Financial Commission/Finacom PLC Ltd., and the Blockchain Association, as “fictitious.” The list includes many more similar organisations. According to the CSA, none of these entities are recognized, and they warn that any entity claiming membership in these organizations is likely engaged in fraudulent activities.
In addition, the regulator recommends that individuals contemplating crypto investments should verify the firms against the CSA’s registered list. Currently, there are 12 authorized crypto trading platforms operating in Canada, along with 11 that have submitted pre-registration undertakings. The CSA emphasized that anyone planning to use a crypto firm claiming certification or membership in a dispute resolution organization should independently confirm the legitimacy of the referenced organization.
The regulator also recommended that individuals looking to invest in crypto should verify the firms with the CSA’s registered list. Currently, there are 12 authorized crypto trading platforms operating in Canada, and 11 have submitted pre-registration undertakings. It should be noted that the regulator’s statement does not address the possibility that the crypto firms themselves may be deceived by the “fake” certifications, and the presence of certifications does not automatically imply the platform is fraudulent.