[2018-03-06] Canadian Regulator Warns Against 'Illegal' Crypto Investment Scheme

[nickbelski]

A finance regulator in the Canadian province of New Brunswick has warned residents about investing in a so-called "cryptocurrency bank" and its associated token.

In a March 5 statement, representatives from the Financial and Consumer Services Commission (FCSC) sounded the alarm about Bitcoin-bank.io, which according to its website promises a daily return on deposits through the use of a "BTCB" token. The site notably restricts the days on which the token in question can be bought or sold, stating that the first such "selling day" isn't until April 23.

According to the FCSC, the Bitcoin-bank offering is illegal.

"The commission took a close look at the website after becoming aware the cryptobank was advertising its investment opportunities on a Canadian online classified site," the regulator said in a statement. "Since it is not registered to trade in, or advise on, securities or derivatives in New Brunswick, it is illegal for Bitcoin-bank.io to carry out these activities in the province."

Additionally, a claimed California address is fake, the commission said upon investigating the location, and that some of the marketing materials distributed by promoters contain fictitious information as well.

"The review also revealed that many of the photographs accompanying team profiles on the website had been taken from other sites with fake names attached, and that content had been copied from other websites," the FCSC said.

The alleged cryptocurrency scam is the latest to take shape in Canada, which has seen a number of schemes solicit investors in recent months.

Last year, Canadian police issued a warning over a bitcoin tax scam, where fraudsters claiming to be part of the nation's Revenue Agency threatened some 40 victims with jail time for unpaid taxes. Those victims were told to withdraw bitcoin from a bitcoin ATM and send the funds to the scammers, and police estimated that the victims sent 340,000 Canadian dollars ($267,000).

It's not clear if the commission will take any further action against Bitcoin-bank.io. In its message, the FCSC advised would-be investors to do their homework before putting their money into anything, concluding:

"Becoming an informed investor is the best way to protect your money. Informed investors don't leave it to chance."

Source: https://www.coindesk.com/canadian-regulator-warns-illegal-crypto-investment-scheme/

[Harlot]

A ponzi scheme disguised into a new token. A new kind of brilliance has emerge from criminals who are looking to take advantage of unknowledgeable traders. This kinds of altcoins that promise some sort of passive income are obviously a scam as their project is so similar to an HYIP program there token serves as nothing in the real world. People will be even lucky to have payments from there so-called token. Still even if there is a prevention that took place a lot of people will still try the altcoin.

[veleten]

with increase in popularity comes increase in scams and fail businesses
bitcoin in the name of the company (just like recently in China companies with a Royal in their names got substantial boost to their  shares value)
adds +100 points to its value hence so many companies are trying to label their projects "bitcoin something"
this ICO and BTCB tokens are looking like a usual Bitconnectlike scam,only promoted by a bank
general public is lured by both:huge returns promises and the novelty of bitcoin,that they heard on the news was something awesome
this particular ICO is nothing by a Ponzi,without anything to back it up

[DooMAD]

According to the FCSC, the Bitcoin-bank offering is illegal.

"The commission took a close look at the website after becoming aware the cryptobank was advertising its investment opportunities on a Canadian online classified site," the regulator said in a statement. "Since it is not registered to trade in, or advise on, securities or derivatives in New Brunswick, it is illegal for Bitcoin-bank.io to carry out these activities in the province."

So if they can presumably shut said website down and perhaps arrest those behind it, that serves as a prime example that additional legislation isn't required to deal with crypto-related scams.  The existing laws would appear to encompass illicit activity in crypto.  This should be sufficient enough. 

Or, if they can't arrest them and shut it down, it doesn't necessarily mean more legislation is required, but perhaps just more funding for enforcement of the existing laws.  I often get the impression that the biggest cheerleaders for more legislation are the bureaucrats trying to make it appear as though we still need them to keep their job.