A regulatory agency is alleging an Edmonton man who runs a Bahamas-based cryptocurrency company breached Alberta securities laws.
On Wednesday, the Alberta Securities Commission announced it is commencing a hearing on allegations Devon Christopher Edwards and KB Crypto Inc. engaged in illegal distribution and unregistered dealings in securities.
A notice of hearing alleges that between February 2021 and November 2022, Edwards and his company raised around US$446,600 from 75 investors without a prospectus, the document that offers potential buyers information about a financial security.
The commission also alleges Edwards and KB Crypto dealt in securities without being registered under Alberta securities laws.
The case will be before the commission in Calgary Oct. 11 to set a date for the hearing.
KB Crypto was incorporated in the Bahamas in November 2021. Edwards is its sole director and shareholder, the commission states.
According to a news release, Edwards is alleged to have solicited funds for a pooled investment “to purchase and trade in contracts for difference (CFDs) on the investors’ behalf. Through these CFDs, investors could indirectly participate in the price movements of foreign currencies, cryptocurrencies, commodities and other assets.”
The investors — at least four of whom were Alberta residents — allegedly opened accounts through KB Crypto’s website and transferred Bitcoin to Edwards, who then converted them to U.S. dollars or “stablecoins” — cryptocurrencies whose value is pegged to real-world assets such as the U.S. dollar. Edwards is then alleged to have used foreign trading platforms to purchase and trade in contracts for difference.
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