Possible Bitcoin [BTC] scam: BCSC warns Canadian Bitcoin exchange promising unrealistic investment returns

Canada’s regulatory agency, the British Columbia Securities Commission [BCSC], issued a warning against a suspicious trading platform, Canada Bitcoin Exchange Inc. [CBE]. The platform was offering excessively attractive investment plans with exponential gains, and subsequently came under the BCSC’s radar recently.

Source: Canada Bitcoin Exchange

The investment returns for all the four plans listed on the website were based on High Yielding Investment Programs [HYIP], which offered extraordinarily high investment returns. The exchange purported 3,586% returns in 48 hours and 7,985% returns in a mere 24 hours. The platform accepted payment mainly in Bitcoin [BTC], implying that recovering the assets would be very difficult in case of fraud.

Canada’s financial watchdogs confirmed that the suspicious entity was not registered to trade in British Columbia. The Commission further urged people to exercise caution while dealing with platforms similar to the one in question.

Another interesting aspect about the platform’s website was that apart from a basic Customer Support section, there was no mention of any licenses granted by any recognized regulatory body. Following the discovery, the BCSC reportedly found out that CBE was an unregulated organization.

Despite many in the online crypto community speculating that CBE might be a scam or a fraudulent organization, it is still not evident whether the platform did dupe investors. Two blockchains associated with the Bitcoin address provided on CBE’s website were identified on the Bitcoin block explorer service, Blockchain.com. Both these aforementioned addresses had recorded zero transactions.

Source: Blockchain.com

For the BCH address,

Source: Blockchain.com

According to domain search portal Who.Is, and newsBTC, the exchange was registered under the domain, NameSilo, LLC. It was further reported that the account was created after 1 August, 2017.

Source: Who.Is

Off late, crypto-platforms and exchanges have flocked to places with crypto-friendly regulations such as Malta and Switzerland, following the massive scrutiny and institutional challenges and warnings associated with trading in the US and Canada.

In the past three months alone, around 40 regulatory bodies in the US and Canada have issued cautionary alerts, urging investors to do their homework before dealing with any crypto-platform.

NASAA [North American Securities Administrators Association] President and Alabama Securities Commission Director, Joseph P Borg, had this to say in August 2018,

“State and provincial securities regulators are committing significant regulatory resources to protect investors from financial harm involving fraudulent ICOs and cryptocurrency-related investment products and also are raising awareness among industry participants of their regulatory responsibilities.”

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