Canada Cracks Down On Unlicensed Cryptocurrency Companies

The OSC launched the crackdown following complaints from customers and prospective investors. Regulatory agencies across North America have stepped up enforcement against crypto exchanges and token issuers in recent weeks.

Regulators call the coordinated campaign Operation Cryptosweep. Agencies from more than 40 North American jurisdictions have joined through the North American Securities Administrators Association. So far, regulators have opened nearly 70 investigations and pursued 35 enforcement actions, some completed and others pending. Joseph P. Borg heads NASAA and directs the Alabama Securities Commission. He described the numbers as only the start: "The persistently expanding exploitation of the crypto ecosystem by fraudsters is a significant threat to Main Street investors in the US and Canada, and NASAA members are committed to combating this threat." Borg added that regulators have issued warnings across all government levels but continue discovering violations. "Despite a series of public warnings from securities regulators at all levels of government, cryptocriminals need to know that state and provincial securities regulators are taking swift and effective action to protect investors from their schemes and scams," he said.

Borg made clear that fraud does not define all token sales and crypto investments. He urged investors to approach such offerings with caution but stopped short of condemning the sector outright. Last year, companies raised more than $5 billion through ICOs. Token sales in the first quarter of 2018 generated more capital than all of 2017.