Quebec’s AMF Regulator Warns Crypto Mining Contracts May Be Securities
The financial regulator of Quebec recent ruled that a crypto mining contract is a security. This follows a call by the regulator for investors in a crypto company to call them after they issued the company freeze orders.
The orders were issued in compliance with existing regulation at the start of February.
Technologies Crypto Inc took about $300,000 from investors who believed their funds were going into a mining operation. Many have been disappointed. The regulator now wants those who invested in the company to contact them. Many of those who invested their money have not been able to recover it.
The announcement wants anyone who was involved with the company in any manner or the two principals to get in touch with them. They have even provided a number. The regulator also issued freezing orders against the company a while back. The company was told it was breaking the law.
What it Was Doing
The company was trading under “Make It Mine.” It asked for $300,000 from investors. Those backing it thought that the money would be used to fund mining. While some did get their money back, others were unable to get anything back.
Attempts at calling the firm have fallen on deaf ears. The orders issued say that the company is not allowed to take any money out of bank accounts. They should also not try to dispose off the mining rigs or partake in securities trading.
This means that the regulator considers an investment contract in the crypto world to be a security. Thus the financial regulator can regulate it under securities laws. The regulator can thus assist those who made the investment to recover their funds.
Not First Time Acting on Crypto
The regulator in Quebec has been known to take action against crypto firms that violate securities laws. It has sought to protect investors from losing their money. A while back, it went after PlexCoin. It later rejected any attempts by the company’s representative to revise the ruling.
In its ruling, it concluded that there were holes in the securities laws. Despite this, the regulator concluded the company was dealing in securities. An injunction against PlexCorps and associated entities were issued. Their website was also shut down and all other related sites. Besides that, their Facebook pages were also covered by the orders.
In October 2018, the superior court in Quebec ruled that PlexCoin and its founders were in contempt of court. The ruling was issued after it was found the company was still trading in securities and asking for money. Authorities in the US appear to be having a similar issue with the PlexCoin Company.
The SEC filed a motion in court asking that its founders be sanctioned. It was still soliciting money from the public despite numerous court orders against it for discovery and accounting of their assets.
While the industry is still young, it is nice to see the regulators are taking crypto seriously. This could help to keep cons at bay in the future.