Canadian Regulator Says Some Crypto Firms Made False Claims Of Being Authorized
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The Canadian Securities Administrators (CSA) has issued a warning to investors about cryptocurrency service providers. In the alert, the CSA said that some crypto service providers made false claims of being authorized and affiliated with regulators and dispute resolution entities.
Canadian regulator warns against crypto service providers
The CSA has also said that ten regulatory and dispute resolution entities mentioned by these crypto service providers were “fake.” Some of the organizations that have been mentioned by the regulator include the Blockchain Association and the Financial Commission.
The Financial Commission is among the most popular entities in the trading services sector. The members of this organization include leading forex and contracts for differences (CFDs) brokers. The brokerage platforms that have registered with the Financial Commission get access to a wide range of services, including dispute resolution.
The membership rules at the Financial Commission are strict. The commission has also removed several brokerage platforms in recent years over their failure to comply with the set regulatory framework.
Financial Commission says regulator “made a mistake”
A spokesperson from the Financial Commission responded to the allegations by saying, “We disagree with the information in the CSA’s notice and believe the regulator made a mistake. We have already engaged legal counsel in Canada and preparing a submission to CSA to remove this designation. We expect this issue to be resolved soon.”
The spokesperson also said that the experience of the commission on the matter made it so that unknown individuals cloned and copied the membership certificates. Such individuals conducted fraudulent activities related to online scams, which the commission was working to detect and warn the public about.
The Financial Commission is also dealing with some clones impersonating it. Earlier this year, it warned about a clone website attempting to dupe brokers. This cloned website had said that GANN Markets and Lotas Capital were active members of the Financial Commission, which was not the case.
The warning by the Canadian regulator focused largely on crypto firms and not FX and CFDs brokers. Most members of the Financial Commission are FX and CFD brokers. It only has five members from the blockchain industry.
The commission also defended its reputation, saying that it has offered dispute resolution services since 2013. The platform is also funded by the membership fees collected from broker members. It further said that it does not endorse or process complaints related to cryptocurrency custody.
The Financial Commission also has a blockchain unit known as the Blockchain Commission. This association was created in 2018 with the objective of uniting professionals across the blockchain industry while supporting collaboration and the development of the best practices around blockchain technology.
The Blockchain Association also sought to offer a dispute resolution mechanism for crypto traders, exchanges, and blockchain projects. The association has had a few members over the years, but it has remained dormant over the last two years. This platform no longer offers services to its members or enroll new members.
