Peter J. Brady, executive director of the BC Securities Commission (BCSC), has temporarily prohibited Xeltox Enterprises Ltd. – a Vancouver-based company doing business as Cryptomus, a crypto asset trading platform – from trading securities or derivatives and engaging in promotional activities.
The BCSC’s staff acquired evidence supporting that Xeltox may be breaching registration requirements under BC’s Securities Act, 1996, and carrying on business in the province as an exchange not recognized by the regulator, according to a news release from the BCSC.
The BCSC said its staff members successfully applied for a temporary order under s. 161 of the Securities Act. In seeking the temporary order, the BCSC considered that the length of time needed to hold a hearing under s. 161(1) could jeopardize the public interest.
Under the temporary order, the executive director banned Xeltox under s. 161(2) from:
- trading in or purchasing securities or derivatives under s. 161(1)(b)(ii)
- engaging in promotional activities on its own behalf in connection with circumstances reasonably expected to benefit it under s. 161(1)(d)(vi)
- participating in promotional activities by or on behalf of an issuer, security holder or party to a derivative, or another person reasonably expected to benefit from such activities under s. 161(1)(d)(v)
The temporary order noted that none of the exemptions under the Securities Act or the relevant regulations applied to Xeltox under s. 161(1)(c).
The temporary order dated May 20 will expire on June 4. At that point, Brady can apply to a BCSC panel for an extension.
About BCSC
The BCSC is an independent provincial government agency and a Canadian Securities Administrators (CSA) member. The BCSC tracks different industries’ compliance with its imposed rules, takes steps to address any misconduct, and offers guidance for investors.
The BCSC said it aims to protect the province’s investment market and ensure that it is honest, fair, competitive, dynamic, and beneficial to the public so that British Columbians can thrive.
In its news release, the BCSC stressed that crypto asset trading platforms that allow Canadians to buy and sell crypto assets should register with the applicable securities regulator and comply with specific conditions seeking to safeguard investors.
The BCSC noted that the CSA’s website lists the platforms that have obtained the authorization to do business with Canadians.