The Canadian Securities Administrators (CSA), an umbrella organization of Canada’s provincial and territorial securities regulators, is warning investors about crypto companies that claim to be authorized by fictitious regulatory or dispute-resolution organizations. The CSA stated in a release, “In an effort to appear legitimate, the purported trading service providers claim they are certified by a fictitious authority or that they are members of a dispute resolution organization.” The CSA did not provide any evidence of wrongdoing by the named groups, and did not immediately respond to a request for comment by CoinDesk.
Most of the groups don’t have any sort of web presence. One exception is The Financial Commission – operated by Finacom – which runs the Blockchain Association (not to be confused with the lobby group in Washington D.C.). The Financial Commission provides an address in Hong Kong’s Wan Chai district and a phone number from a Brooklyn, New York, area code. A spokesperson for the group told journalists, “We are a legitimate company and do not agree with the characterization of our business.” Filings from Hong Kong’s corporate registry show it’s registered to Alexey Pavlenko, who is listed on the website as a board member of the organization. Pavlenko is also listed as a director for the firm’s U.K entity.
The Financial Commission’s Blockchain Association unit also rejected the CSA’s characterization. Chief Operating Officer Nikolai Isayev said in an email to journalists, “We do not agree with the information in the CSA’s notice and believe the regulator made a mistake. We have already engaged legal counsel in Canada and are preparing a submission to CSA to remove this designation. We expect this issue to be resolved soon.” The group has had a handful of members over the years, but has not provided any services in the last two years and is currently in a dormant state. The majority of the members of the Financial Commission are foreign currency trading brokerages. The only notable blockchain company is YouHolder, a centralized yield platform.
The CSA urged investors to “try to independently verify that the referenced organization actually exists” before investing in crypto companies claiming to be certified or a member of a dispute resolution organization.