June 23, 2022

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In one decision, the tribunal ordered a $2 million penalty, market bans, and almost $100,000 in costs against Seychelles-based Mek Global Ltd. and Singapore-based Phoenixfin Pte. Ltd. — which didn’t participate in the hearing — after finding that they violated Ontario securities laws by operating the KuCoin platform, and trading crypto contracts and futures, without registration. The tribunal found that KuCoin issued securities without a prospectus or an exemption.

In its ruling, the panel found that crypto contracts and crypto futures meet the definition of securities as they are “investment contracts”.

“I conclude that all the elements of the test of whether a product is an investment contract have been met. The investors paid money into the enterprise, expected a profit and were completely dependent on KuCoin for the success of the enterprise,” the panel said in its decision, adding there are also serious investor protection concerns associated with dealing in these products.

“These include their inherent risks, complexity, the use of margin or leverage, and the potential volatility of the underlying assets,” it said.

Where are all the negligence lawsuits against the advisors who sold Fortress to retail clients? Seems like a straightforward case. The advisors were making huge commissions for promoting a black box that never made sense. The conflict of interest and inability to conduct KYP are central issues. It never was a suitable product for all but the truly sophisticated gamblers (not those who FAs marked suitability on documents in order to sell the product!). See: https://lnkd.in/g3VYKvKS #fortress #lawyers #lawsuit #negligence #financialadvisor
#insuranceagent #financialplanner

investmentexecutive.com

Pair charged in Fortress Real scheme

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