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As we pass the halfway point of 2024, it is clear to see that Ontarian law enforcement is more than ready to take a tough stance on crypto regulatory breaches and criminal behaviors.
Ontario’s self-styled “Crypto King” is facing sanctions for alleged fraudulent activity, Binance is set to face a class-action lawsuit filed by Canadian investors, and investigations are also underway over a cryptocurrency fraud case that saw a Guelph man lose more than $750,000.
While these stories may make potential crypto investors nervous, they should also serve to illustrate how actively cases like this are pursued and underline the importance of carrying out due diligence. Similar care is needed when choosing where to spend your crypto. For example, many people choose to visit a crypto casino to spend their tokens. These sites are accessible to all, even to those based outside Ontario, where iGaming legislation is not yet in place. Crypto-based casinos allow players anonymity and privacy when gambling, yet as they are licenced overseas, or sometimes not at all, extra care is needed when choosing a site.
Despite potential drawbacks, when the proper care is taken, the crypto industry has provided exciting investment opportunities for Canadian investors in recent years. Bitcoin is the most famous and most popular and was launched in January 2009 as the first cryptocurrency.
Many others have appeared since then, enjoying varying levels of success including Tether, Ethereum, Binance Coin, Dogecoin, and Solana meme coins. Existing and proven cryptocurrencies can offer a return on investments, but identifying a new currency in its infancy or presale stage could see significant growth. Determining the credibility of new cryptocurrencies can be time-consuming, but carrying out this early legwork can mitigate risk.
But recent Ontarian news stories have also highlighted the importance of understanding who you are going into business with, especially in the case of the “Crypto King” Aiden Pleterski. Following reports that 25-year-old Pleterski was still traveling the world during bankruptcy proceedings, the law eventually caught up with the alleged fraudster.
An investigation carried out by Rob Stelzer of the Grant Thornton Accounting Firm discovered that of the $40 million given to Pleterski to invest in foreign exchange and cryptocurrency, only 2% had been invested. It is also alleged that Pleterski has spent $16 million of this money on an elaborate lifestyle that took in private air travel, vacations, the leasing of properties, and a luxury car collection.
Since these allegations, the OSC (Ontario Securities Commission) and DRPS (Durham Regional Police Service) have announced that Pleterski and another individual have been charged with fraudulent activity and money laundering.
Police have also taken the time to warn consumers about the dangers of passing sensitive information to third parties following a case of fraud that saw a Guelph man being scammed out of $750,000.
Opportunists then contacted the victim offering help and advising him to download an app to help recover the stolen funds. The app gave scammers access to the man’s smartphone where a further $12,000 was stolen.
But it is not just individual opportunist attacks that are making headlines, with the world’s largest crypto exchange facing a lawsuit from Canadian investors.
Binance is being targeted regarding alleged trading breaches surrounding crypto derivative product sales. The claimants argue that crypto derivatives are securities and contravene section 133 of the OSA (Ontario Securities Act).
Binance withdrew from its operations in Ontario in 2021 because of restrictive regulations. Binance instructed Ontario residents to close their accounts and cease trading, but the borderless nature of the industry meant that some continued to trade.
This led to a further investigation from the OSC before Binance withdrew completely from Canadian operations in 2023.
The continued popularity of cryptocurrency is unlikely to be affected negatively by stories of legislative clampdowns in the first half of 2024, conversely, it could help the industry as people recognize that the regulations implemented are working and the industry is well protected.
As crypto-assets continue to rise in value, more businesses are opening up to accepting cryptocurrencies as a form of payment. The benefit of fast and easy international transactions, as well as increased security and transparency offered by blockchain technology make it a popular choice among consumers in Canada.
Canada and Ontario’s decision to implement strict regulatory frameworks provides a strong and secure foundation for the country’s crypto industry to grow, and taking action against fraudsters and companies that don’t adhere to these rules sends a strong message.
Featured image by Kanchanara on Unsplash
