Canada’s crypto sector has been facing an increase in the number of companies falsely claiming to be authorized to offer their services in the country, according to the Canadian Securities Administrators (CSA). These firms have been making false claims about being affiliated with regulatory or dispute resolution organizations that do not actually exist.
The main objective of these false claims is to make the trading services offered by these companies appear legitimate. For instance, one of the companies claimed to possess a certificate that vouched for its reliability and trustworthiness as an online trading platform. However, upon investigation, it was discovered that the certificate was completely fake.
In addition to the false claims of affiliation with regulatory organizations, some companies have even gone to the extent of including links on their websites that lead to fake regulatory or dispute resolution organizations. These fake regulators have their own websites, which are designed to deceive users.
Recognizing the seriousness of this issue, Canadian authorities have compiled a list of fake regulatory and dispute resolution organizations. The list includes names such as Financial Commission/Finacom PLC Ltd., Financial Standard Commission FSC Canada, Crypto Commission Authority/Crypto Commission Ltd., Blockchain Association (U.K. and Hong Kong), International Financial Market Supervisory Authority, European Financial Services and Exchange Commission, British Investment Commission/BIC PLC Ltd., Crypto Conduct Authority/Crypto Frugal Ltd. (Ireland), International Regulatory & Brokerage E-markets, and Crypto Conduct Authority/Crypto Frugal Ltd. (U.K.). These websites are carefully crafted to appear credible, featuring references to complaint processing and dispute resolutions. Furthermore, they even provide addresses that correspond to real locations, such as Buenos Aires-based Plaza de Mayo or London’s Canary Wharf.
Despite the initial appearance of credibility, closer inspection of these websites reveals unpolished language with syntax, grammar, and spelling errors – clear red flags commonly found in scammer-made emails and fake online pages.
The Canadian authorities strongly advise investors, especially those interested in cryptocurrencies, to be aware that none of the organizations listed above are actual regulators or dispute resolution organizations. Any entity claiming to be approved or regulated by these organizations is most likely fraudulent. However, it is important to note that the list provided by Canadian authorities may not be exhaustive, and new fake organizations may emerge in the future.
Given the large number of self-regulatory organizations and national regulatory agencies in the investment market, it can be challenging to distinguish the legitimate ones from the fraudulent ones. However, one effective method to identify the legitimate ones is by checking if they are members, associate members, or affiliate members of the International Organization of Securities Commissions (IOSCO). This organization includes multiple CSA members, verifying their authenticity.
To ensure their own safety, individuals interested in using crypto companies in Canada should conduct independent research to verify if a platform is regulated, and then confirm the legitimacy of the regulator. It is important not to solely rely on the websites of the organizations in question. Instead, individuals should look for news articles, official documents, or any information issued by reputable sources referencing the legitimacy of the crypto business in question.
Moreover, those planning to invest in cryptocurrencies should stick to trading platforms registered with the CSA, as fraudulent platforms often try to entice investors with offers that seem too good to be true. By following these guidelines, investors can protect themselves to some extent from crypto scammers who employ this type of fraudulent activity.
While these measures cannot completely eliminate all risks associated with cryptocurrency investments, they serve as important precautions against falling victim to scammers. It is crucial for investors to be vigilant and exercise due diligence when engaging in the crypto market.
In conclusion, the rise in the number of companies falsely claiming authorization to offer crypto services in Canada is a serious concern. Canadian authorities are actively addressing this issue by identifying fake regulatory and dispute resolution organizations. Investors are strongly advised to verify the legitimacy of platforms and regulators independently, and to rely on reputable sources for information. By taking these precautions, investors can mitigate the risk of falling victim to fraudulent crypto schemes.
