Canadian citizens are advised to check cryptocurrency trading service providers, as the platforms may be using “fictitious” regulatory bodies to increase their credibility.
According to a June 20 Investor Alert from the Canadian Securities Administrators, some “supposed” cryptocurrency platforms are claiming to be approved by certain regulatory authorities or dispute resolution organizations in “an effort to appear legitimate.”
“The websites appear credible at first glance, with references to complaint processing, dispute resolution, and compensation to aggrieved investors,” the CSA said. it’s a statement.
Investor Alert: Some crypto websites use fake regulatory and dispute resolution organizations to appear legitimate pic.twitter.com/2QIpwnJdcB
—CSA_News (@CSA_News) June 20, 2023
Investor Alert: Some cryptocurrency websites use fake dispute resolution and regulatory organizations to appear legitimate.
According to the CSA, one of these websites went so far as to claim that its “dummy certification makes it a reliable and trustworthy online trading platform”:
“But on closer inspection, the language of websites can be clunky and unpolished, with spelling, grammar, or syntax errors a common ‘red flag’ for rogue entities.”
Some “fictitious” regulatory bodies and organizations, according to the CSA, include the Financial Standard Commission FSC Canada, Financial Commission/Finacom PLC Ltd., and their associated entity, the Blockchain Association, among others.
The CSA claims that none of the listed entities are “known,” and has also suggested that any entities claiming to be members of the organizations are “likely fraudulent.”
Cointelegraph found a list of cryptocurrency companies promoting themselves as members of the “Blockchain Association” on their website. The entity is one of the dispute resolution organizations that the CSA accused of being illegitimate.
Cointelegraph has reached out to Etheralabs, Gallant Exchange, SmartDec, StormGain, YouHodler and Finacom PLC Ltd., Cointelligence, and Asia Blockchain for comment on the regulatory notice, given its listing on the association’s website.
In an emailed statement to Cointelegraph, On Yavin, a managing partner at Cointelligence, declined to comment on the content of the regulatory notice, but said they were listed despite not having collaborated with the entity.
Yavin said that he has since contacted a representative of the association and has gotten his logo removed.
“Anyone considering using a cryptocurrency firm that claims to be certified or a member of a dispute resolution organization should try to independently verify that the referenced organization actually exists,” the CSA said. it’s a statement.
The regulator also advised that citizens considering investing in cryptocurrency check companies against those registered with the CSA.. There are currently 12 cryptocurrency trading platforms authorized to operate in Canada, while there are 11 that have submitted pre-registration commitments.
Although the regulator’s statement does not refer to this, It should be noted that cryptocurrency firms themselves may not be aware of so-called “fake” certifications, and the listing of certifications does not necessarily mean that a platform is “fraudulent.”
The full list of regulatory bodies and entities that have been accused of being “false” by the CSA include:
- Financial Standard Commission FSC Canada
- Financial Commission/Finacom PLC Ltd. (Financial Commission/Finacom PLC Ltd.)
- Blockchain Association
- European Financial Services and Exchange Commission
- Crypto Conduct Authority/Crypto Frugal Ltd. (Ireland)
- Crypto Conduct Authority/Crypto Frugal Ltd. (UK)
- International Regulatory & Brokerage E-markets
- British Investment Commission/BIC PLC Ltd.
- International Financial Market Supervisory Authority
- Crypto Commission Authority/Crypto Commission Ltd.
Update (June 21, 8:55am UTC): Added a response from the Managing Partner of Cointelligence On Yavin
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