Canadian authorities are on high alert over ICO mania and recent SEC charges

Supported By:

Net Patrol International Inc.  Data Investigation and Forensic Services
Bankruptcy and Insolvency Trustees

Canadian regulators are on high alert over a “mania” surrounding ICOs, technology-based coin or crypto-currency offerings that are being snapped up by investors around the world to the tune of nearly US$3.8 billion.

“You can see what’s happening in the marketplace — it’s going crazy,” Maureen Jensen, chair of the Ontario Securities Commission, said in an interview with the Financial Post.

“We are … quite concerned,” she said, adding that the OSC is consulting on the ICO issues with the Canadian Securities Administrators, an umbrella organization for the country’s provincial and territorial capital markets watchdogs.

“People really should (be careful),” Jensen said. “Don’t jump on the bandwagon — know what you’re buying.”
In an ICO, or initial coin offering, an issuer sells units of a cryptocurrency or digital tokens, which may be used to conduct transactions on a related network.

Their popularity has been driven by the rise of Bitcoin, the original cryptocurrency backed by the transactional technology blockchain, which has been compared with significant tech developments such as the Internet and World Wide Web.

The price of Bitcoin, which first came on the scene in 2009, has soared by more than 2,000 per cent over the past year and was closing in on US$18,000 Friday. The cryptocurrency’s noteworthy holders include the Winklevoss twins, best known for suing Facebook founder Mark Zuckerberg for allegedly stealing their idea for a social network.
Bitcoin’s success has spurred a flurry of ICO offerings around the world, launching such cryptocurrencies as Ripple, Litecoin and Dash.

Ethereum, a rival blockchain platform whose founding team was largely Canadian, supports its own cryptocurrency called Ether, which clients of the platform use as a form of payment.

Waterloo-based online messenger company Kik Interactive Inc. raised more than $100-million from a token offering in September, but Canadians were left out of the action after its backers cited uncertainty over whether securities laws would apply to the offering.

Read the full story over at the Financial Post.

This story was summarized by Canadian Fraud News Inc.