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BC regulator warns investors of fake cryptocurrency offerings

The British Columbia Securities Commission (BCSC) has issued another alert for investors wanting to jump on the cryptocurrency wagon.

In a statement, the regulator said it has observed an increase in the number of cryptocurrency offerings involving an initial coin offering (ICO) or initial token offering (ITO).

The BCSC said firms may use such offerings to amass capital or to raise funds for a project of business, issuing newly invented coins or tokens.

“In many cases, these coins and tokens are securities.  If they are securities, the company, and associated individuals, conducting the ICO or ITO must comply with securities law,” the regulator said.

The BCSC said investors should practice caution when they consider investing in any cryptocurrency offering, especially in firms which do not follow through on their business plan or idea.

“Some companies issue coins or tokens solely for speculative trading in the secondary market, which is an inherently risky activity for investors,” it said.

The regulator has published an Investment Caution List which identifies unregistered activity and unqualified securities promoted in the province.  Investors can sign up to receive alerts and to report any questionable securities being offered in British Columbia.

Other regulators have already published warnings about malicious cryptocurrency offerings. Just recently, the US Securities and Exchange Commission has launched a fake ICO website to educate investors about the risks of investing in questionable offerings.