Canada Warns of Crypto Trading Platforms Using Fake Credentials

The Canadian securities regulator has issued a warning to citizens about the growth of crypto trading platforms that fraudulently claim approval or connections with regulatory bodies. The CSA also noted that some crypto platforms create an illusion of legitimacy by falsely claiming certification.

According to the CSA, fraudulent crypto platforms often feature links to trick the user into thinking that they are backed or endorsed by regulatory organizations.

List of Fictitious Regulatory Organizations Identified by CSA

The CSA also cautioned that many dubious crypto platforms often falsely refer to themselves as “reliable and trustworthy online trading platforms” based on bogus certifications.

Among a list of ten such institutions, these fake entities include the Financial Standard Commission FSC Canada, Blockchain Association, and European Financial Services and Exchange Commission.

The agency also warned that malicious websites and platforms often appear genuine in every way. Many even include references to complaint processing, dispute resolution, and investor redress portals.

However, the CSA emphasizes that there are some typical ‘red flags’ upon closer inspection. This includes poor language, unpolished information, spelling, punctuation, or syntax mistakes.

Furthermore, it highlights, “Don’t just rely on the organization’s website – check to see if the organization is mentioned in news articles or is referenced by other well-known entities.”

Scams Prevalent in the Crypto Industry

Scam businesses are now widespread in the industry. One of these shady platforms was even falsely utilizing Binance’s name in the UK. After causing a stir on Reddit, Binance acknowledged that the entity is not associated with the global exchange and also served it a cease and desist notice.

Even Apple recently flagged a rogue program called Trezor Wallet Suite for passing itself as legitimate. The fake program contains crypto-stealing malware and was a counterfeit of Trezor Suite Lite, a valid application.

That said, Canada has tightened regulations for the industry. As a result of the CSA placing onerous compliance requirements on exchanges, Bybit and Binance suspended operations in the region. The new rules, among other requirements, prohibit exchanges from listing stablecoins and tokens the regulator views as securities.

In the meantime, Toronto is gearing up to host a Blockchain Conference as part of Canada Crypto Week in August. The official release confirms that over 30 crypto-related activities will take place during the week.