Digital assets in the contemporary financial atmosphere are emerging markets. Countries and individuals are planning and drafting law enforcement regulations. Countries are evaluating the scope of CBDCs and drafting regulations for the same. On the other hand, individuals are finding new ways of mining and trading different coins.
But there are issues related to the expansion of cryptocurrencies as well. The issues that revolve around crypto assets and digital currencies are proven volatility, anonymity, tax evasion, money laundering and terror financing.
Amid this, the Canadian Securities Administrators (CSA) warned Canadians to be vigilant about purported crypto trading service providers that are claiming to be authorized or affiliated with fictitious regulatory or dispute resolution organizations.
This press release was published by CSA after it came across various trading service providers to appear legitimate, claiming they are certified by a fictitious authority or that they are members of a dispute resolution organization. One of them says its fictitious certification makes it “a reliable and trustable online trading platform.” Some of the purported trading services’ websites include links to these fake regulatory or dispute resolution organizations, which have their websites.
The service providers managed to show the fake regulatory or dispute resolution organizations including Financial Standard Commission FSC Canada, Blockchain Association (U.K. and Hong Kong), European Financial Services and Exchange Commission, Crypto Conduct Authority (Ireland) Crypto Conduct Authority (U.K), British Investment Commission and International Financial Market Supervisory Authority.
The websites appear to be credible at first glance, with references to complaint processing, dispute resolution and providing redress to aggrieved investors. The addresses refer to real locations, such as Canary Wharf in London or Plaza de Mayo in Buenos Aires. But upon closer inspection, the websites’ language can be awkward and unpolished, with errors in spelling, grammar or syntax – a common “red flag” of illegitimate entities.
The CSA provided certain clarification and crucial information to investors, None of the above organizations is a known regulator of an established dispute resolution organization, and any entity claiming to be approved by or a member of those organizations is likely fraudulent.
Further, it also underlined that the fake organizational names listed above are only those that the CSA has identified so far, and other fake names with similar intent could appear at any time. Also, many national regulatory agencies and self-regulatory organizations of the investment market are members of the International Organization of Securities Commissions, a legitimate organization that includes several CSA members.
The CSA advises investors to exercise caution when dealing with these entities. Individuals must verify the legitimacy of any regulatory or dispute resolution organization before engaging in financial transactions with them. Notably, many of these organizations lack an online presence, further raising concerns about their legitimacy.
