The British Columbia Securities Commission (BCSC) today announced its participation in an international crackdown on fraudulent Initial Coin Offerings (ICOs) and cryptocurrency-related investment products. The work is being coordinated by the North American Securities Administrators Association (NASAA), of which the BCSC is a member.
As part of “Operation Cryptosweep,” the BCSC has issued letters to 12 offshore companies that advertise their ICOs in B.C. or allow B.C. residents to participate in their ICOs. The BCSC has asked them to cease their activities in B.C. and to resume after they ensure compliance with B.C. law. The BCSC also issued an alert last week advising investors to exercise caution when considering investing in a cryptocurrency offering.
“Fraudsters are always looking for new ways to attract victims and many are taking advantage of the popularity of cryptocurrencies to perpetrate their schemes,” said Doug Muir, Director of Enforcement at the BCSC. “While not every ICO or crypto-asset related investment is a fraud, the BCSC encourages investors to exercise caution and do their research before making an ICO or cryptocurrency related investment.”
In April 2018, NASAA members began a coordinated series of investigations into ICOs and cryptocurrency-related investment products. Those investigations identified hundreds of ICOs being advertised on ICO aggregation sites to attract investor interest in the planned cryptocurrency offerings, and further examination of those ICOs resulted in the enforcement actions being announced today and many ongoing investigations.
NASAA’s task force also found approximately 30,000 crypto-related domain name registrations, the vast majority of which appeared in 2017 and 2018.
A critical component of “Operation Cryptosweep” is raising public awareness of the risks associated with ICOs and cryptocurrency-related investment products. The BCSC has created resources to help investors become better informed about cryptocurrencies and ICOs. For more information, please visit https://www.investright.org/about-investing/what-are-initial-coin-offerings-or-icos/.
About the British Columbia Securities Commission ( www.bcsc.bc.ca )
The British Columbia Securities Commission is the independent provincial government agency responsible for regulating capital markets in British Columbia through the administration of the Securities Act. Our mission is to protect and promote the public interest by fostering:
- A securities market that is fair and warrants public confidence
- A dynamic and competitive securities industry that provides investment opportunities and access to capital