Tag: virtual currencies

Quebec City businessman believed to behind PlexCoin found guilty of contempt of court

Dominic Lacroix, a Quebec City businessman believed by the Quebec financial watchdog to be behind the virtual currency PlexCoin, was found guilty of contempt of court.

What happened: Lacroix and his company DL Innov inc. failed to respect broad ex parte orders issued by the Quebec Financial Markets Administrative Tribunal on July 20th that forbade them from “engaging in activities for the purpose of directly or indirectly trading in any form of investment” covered by section 1 of the Quebec Securities Act, either in Quebec or from Quebec to outside of the province.

“Public interest is at stake,” said Quebec Superior Court Justice Marc Lesage in a ruling issued mid-October. “Investor protection is primordial.”

Canadian financial regulators provide guidance on cryptocurrency offerings

Canadian financial regulators, in lockstep with a growing number of jurisdictions, has put the cryptocurrency world on notice after confirming the potential applicability of Canadian securities laws to virtual currencies and related trading and marketplace operations.

Cryptocurrency offerings can provide new opportunities for business to raise capital and for investors to access a broader range of investments but they also raise investor protection concerns due to its volatility, lack of transparency, custody, liquidity and the use of cryptocurrency exchanges, notes the Canadian Securities Administrators in a recently published Staff Notice 46-307.

“Investors may (also) be harmed by unethical practices or illegal schemes, and may not understand the properties of the investment products that they are purchasing,” said the notice.

Bitcoin’s promise lies under the hood

Scandals may have bruised Bitcoin’s image and elicited growing calls for government intervention, but it has done little to mask the potential of virtual currencies and the promise behind Bitcoin’s underlying technology.

Bitcoin, the most popular among 200 or so other virtual currencies created since 2009, is an ingenious computer code that has monetary value controlled and stored entirely by computers. It is essentially a peer-to-peer cash system, a form of e-money, valued in units of Bitcoin divisible much like the Canadian dollar into pennies. It is not, however, connected to any physical commodity, state or central banking authority.

But more importantly, Bitcoin is also a payment system, a peer-to-peer network that allows for the proof and transfer of ownership without the need of a trusted third party like a bank. The implications are enormous, particularly for the financial sector, with a growing number of observers going so far as to describe the technology behind Bitcoin as disruptive as the personal computer was when it surfaced in 1975 and the Internet in 1993.