Canada’s chief watchdog hits EliteSFX with a regulatory warning

abdelaziz Fathi

Canada’s mega regulator, the Investment Industry Regulatory Organization (IIROC), today warned Canadian investors not to be fooled by EliteS​FX.

The company has been targeting citizens of Canada’s provinces via commercial ads on classified websites, but EliteS​FX is not allowed to, since it is not registered to trade in or advertise on, securities or exchange contracts in the province.

EliteS​FX falsely claims to be an IIROC-regulated online trading broker and uses IIROC’s and its legitimate dealer members’ information on forms and contracts to entice investors. The company is an offshore, unregulated entity, the regulator said.

Once fraudsters have targeted an investor for one of these crypto scams, they are relentless in their communications. Phone calls start out as friendly and business-like, albeit usually very persistent. Meanwhile, the regulator urges customers concerned about or involved in such transactions, to get in touch.

FinanceFeeds webinar: Expert panel to discuss market data for multi-asset brokerages  

IIROC enjoys a unique structure

“Elitesfx is luring investors with promises of quick profits in cryptocurrency trading. When investors try to withdraw funds from their account, Elitesfx claims that their withdrawals are put “on hold” by IIROC and they are required to “upgrade” their accounts,” the statement further cautions.

In such circumstances, entities begin to appear using the so-called aggressive marketing (including incomplete or insufficient for risk assessment information), to offer the opportunity to invest in crypto-assets. Locals often lack the knowledge and awareness of the risks associated with such forms of investment, IIROC said.

Additionally, the authority noted the lack of proper regulations in place and that crypto is difficult to understand and convert back to cash. Thus, crypto assets are somewhat murky investments and are difficult to be kept safe, unlike ‎strictly regulated traditional financial markets.

The IIROC also warns of the substantial potential for fraud at this time, saying that crooks often try to capitalize on high-profile news events to lure investors into financial cons.

While IIROC rarely uses its power, but the watchdog intervenes, particularly in situations where no other domestic regulator has the power to act (such as where a firm is proposing to offer a foreign-produced highly-leveraged product to retail clients).

Canada has made localized attempts to regulate specific aspects of cryptocurrencies. While some of those instances are more concerning than others, none of it has officially banned the virtual asset class. Instead, the country has taken a stance similar to other countries to regulate the sector and prevent its use in criminal activities.

Read this next

Institutional FX

Invast Global ramps up its offering with 10 soft commodity CFDs

Sydney-based prime-of-prime provider Invast Global has expanded its offering with the addition of ten soft commodity CFDs, which increases their index and commodity CFD offering to 35 instruments.

Retail FX

FF Simple and Smart Trades says Goodbye to CySEC authorization

The Cyprus Securities and Exchange Commission (CySEC) confirmed that it has wholly withdrawn the Cyprus Investment Firm (CIF) licenses of FF Simple and Smart Trades Investment Services Ltd.

Crypto Insider

Shining the Light in Crypto’s Dark Places

Something changed in regulators’ minds after the November crash of the FTX crypto exchange.

Executive Moves

Financial Commission Adds Sam Low to Dispute Resolution Committee

The Financial Commission (FinaCom PLC), a dispute resolution service that caters to the financial services industry, has appointed Sam Low as the newest member of its Dispute Resolution Committee (DRC).

Digital Assets, Uncategorized

De-facto owner of Bithumb exchange arrested in South Korea

South Korean prosecutors have arrested Kang Jong-Hyun, the anonymous chairman and owner of the country’s largest cryptocurrency exchange, Bithumb, on charges of embezzlement and stock manipulation.

Retail FX

Interactive Brokers volumes snap three-month losing streak

Electronic brokerage firm Interactive Brokers LLC (NASDAQ:IBKR) said its trading volumes rose in January, an indication that investor confidence in the financial markets is rebounding after having been fairly mixed over the past few months.

Digital Assets

VVF invests $5 million in Everscale, a potential Layer 2 solution for Venom blockchain

“For us, this is a strategic investment aimed at the technological development of projects and teams around technologies that we focus on and actively develop. In particular, we are talking about the Venom blockchain project and its ecosystem, which is planned to be launched soon and for which Everscale is a potential Layer 2 solution.”

Institutional FX

FXSpotStream volume ends string of declines on January rebound

Trading volumes on institutional FX platforms surged in January as traders increased their bets on central bankers’ policy with evidence mounting that inflation and economic growth are both losing momentum.

Industry News

DeFi firm Aurox launches SEC-compliant crowdfunding campaign on tZERO

“This is a great opportunity for us to raise capital from our community and the broader public on a leading fully regulated platform. We are confident that the tZERO Markets platform will provide us with the exposure and reach we need to attract a diverse investors to support our business growth.”

<