The Canadian crypto sector has recently experienced a surge in the number of companies falsely claiming to be authorized service providers, according to the Canadian Securities Administrators (CSA). These firms often claim affiliation with fictitious regulatory or dispute resolution organizations, making their purported trading services appear legitimate. While some may seem credible at first glance, let’s dive deeper into the matter.
One such company claimed to possess a certificate that made it “a reliable and trustable online trading platform.” However, upon closer scrutiny, it became clear that the certification was entirely bogus. Others have even embedded links on their websites, leading to counterfeit regulatory or dispute resolution organizations, established with the sole purpose of deceiving users.
Canadian authorities have published a list of fake regulatory and dispute resolution organizations, some of which include the Financial Commission/Finacom PLC Ltd., FSC Canada, Crypto Commission Authority/Crypto Commission Ltd., and the Blockchain Association. The websites for these organizations may initially appear credible, but distorted language, syntax errors, and spelling mistakes are often telltale signs of their fraudulent nature.
Investors should be aware that these listed organizations are neither known regulators nor real dispute resolution organizations. Any company claiming to be approved or regulated by these entities is most likely a sham. Moreover, it is worth noting that the list of fake organizations may not be exhaustive, and new ones might surface as old ones are exposed.
In a market rife with self-regulatory organizations and national regulatory agencies, identifying fraudulent ones can be challenging. One way to verify their legitimacy is by determining if they are members, associate members, or affiliate members of the International Organization of Securities Commissions, a credible organization also including several CSA members.
It is crucial for individuals wishing to use crypto companies in Canada to independently verify whether the platform is regulated and confirm the authenticity of the regulator. Authorities caution against relying solely on organizations’ websites, suggesting cross-referencing news articles, official documents, and information from reputable sources pertaining to the crypto business.
Lastly, investors should stick to legitimate trading platforms registered with the CSA. Fraudulent platforms may attempt to offer attractive deals to lure investors, but if something seems too good to be true, it probably isn’t. Although the mentioned precautions cannot entirely eliminate risks, they can help protect investors from crypto scammers employing such tactics.
Source: Cryptonews
