The Canadian Securities Administrators (CSA), an umbrella organization consisting of Canada’s provincial and territorial securities regulators, issued a cautionary statement aimed at investors about cryptocurrency companies claiming to have obtained authorization by non-existent regulatory or dispute-resolution organizations. The warning highlights that, in an effort to appear legitimate, these purported trading service providers have allegedly asserted certification through these fictitious organizations or memberships.
Among the organizations named by the CSA are Financial Standard Commission FSC Canada, Financial Commission/Finacom PLC Ltd., European Financial Services and Exchange Commission, Crypto Conduct Authority/Crypto Frugal Ltd. (Ireland), Crypto Conduct Authority/Crypto Frugal Ltd. (U.K.), International Regulatory & Brokerage E-markets, British Investment Commission/BIC PLC Ltd., International Financial Market Supervisory Authority, and Crypto Commission Authority/Crypto Commission Ltd. While no explicit evidence of misconduct has been provided by these groups, the CSA urges potential investors to independently verify the veracity of these organizations before engaging with crypto firms claiming certification or memberships.
One organization named by the CSA, the Financial Commission, operates under the guidance of Finacom and runs the Blockchain Association. The Commission lists an address in Hong Kong’s Wan Chai district, which is commonly used to register companies, and a phone number originating from Brooklyn, New York. The spokesperson of the group contests the characterization brought forth by the CSA, claiming that they are, in fact, a legitimate company.
Records obtained from Hong Kong’s corporate registry show that the Financial Commission was registered by Alexey Pavlenko. Pavlenko is not only a board member of the organization but also serves as a director for the company’s U.K. entity. Among the Financial Commission’s members, foreign currency trading brokerages dominate the list. In the meantime, YouHolder, a centralized yield platform notable within blockchain circles, remains the exception.
Despite seeking comment from YouHolder, no response was forthcoming. As the blockchain industry continues to develop, regulatory precautions and requirements must evolve in tandem. Investors should proceed with caution, verifying crypto firms that claim to be certified, or members of dispute resolution organizations, to avoid falling prey to bad actors. The latest warning from the CSA serves as a critical reminder that changes in the blockchain landscape demand constant vigilance from both regulators and investors in equal measure.
Source: Coindesk
