Canadian Securities Administrators Caution Against “Fake” Regulatory Stamps

In a June 20 investor alert released by the Canadian Securities Administrators (CSA), the regulator has cautioned against fake regulatory and dispute resolution entities being used by crypto servicers to appear authentic. The CSA alerted the community to stay vigilant against the purported crypto trading firms claiming to be “authorized or affiliated with fictitious regulatory or dispute resolution organizations”.

The apex Canadian securities regulator took to Twitter to alert the community against fake crypto websites:

The CSA stated in its alert that one of such fake entities went on to claim that owing to the ‘fictitious certification,’ it is now “a reliable and trustable online trading platform.” Notably, these purported trading servicers’ websites reportedly tend to have links to illegitimate regulatory or dispute resolution organizations, having websites of their own.

These fictitious regulatory or dispute resolution entities are reported to include Financial Standard Commission (FSC, Canada), Financial Commission/Finacom PLC Ltd., Blockchain Association, European Financial Services, and Exchange Commission, Crypto Conduct Authority/Crypto Frugal Ltd. (Ireland), Crypto Conduct Authority/Crypto Frugal Ltd. (United Kingdom), International Regulatory & Brokerage E-markets, British Investment Commission/BIC PLC Ltd., International Financial Market Supervisory Authority, and Crypto Commission Authority/Crypto Commission Ltd.

As per the claims made by the CSA, the above-mentioned entities are not legitimate. The regulator asserted that any entities that claim to be a member of these organizations are “likely fraudulent.” Notably, the addresses of these entities pertain to real-world locations, including Canary Wharf in London or Plaza de Mayo in Buenos Aires.

Further, the CSA asserted that while the websites of these fake entities initially exhibit credibility, they also have complaint processing and dispute resolution features available, seemingly intending to provide grievance ‘redressal to aggrieved investors.’

But a closer look flags the mediocre language used on the websites, having apparent spelling, grammar, or syntax errors. The CSA advised that various legitimate investment market national regulatory agencies (NRAs) and self-regulatory organizations (SROs) are members of the International Organization of Securities Commissions (IOSC).