Crypto-mining operation a sham: OSC

The Ontario Securities Commission (OSC) is alleging that a purported crypto-asset mining scheme was not what it appeared to be.

The regulator has unveiled allegations accusing Miner Edge Inc., Miner Edge Corp. and their founder, Rakesh Handa, of violating securities rules by raising over $100,000 from 90 investors around the world to finance purported crypto-mining efforts — which, the OSC alleged, were simply “a sham.”

In its allegations, the commission said that “no meaningful steps were taken to establish [the mining] operations, Miner Edge’s promotional materials were full of misrepresentations, and Handa misappropriated investor funds to benefit himself and his family.”

The firms purportedly raised funds from investors through an initial coin offering (ICO) and through direct solicitations, which were promoted via social media.

“This proceeding serves to caution investors regarding the presence of illegal and dishonest conduct in the emerging crypto-asset sector,” the OSC said in its allegations.

The regulator also alleged that Handa “repeatedly lied to and misled staff while testifying under oath, concealed critical documents, unlawfully disclosed that he was to be examined by staff and interfered with a key witness.”

The allegations have not been proven.

The OSC will hold a hearing into the matter on Jan. 20, 2020. It is seeking permanent bans and monetary sanctions agains the defendants.

James Langton

James is a senior reporter for Advisor.ca and its sister publication, Investment Executive. He has been reporting on regulation, securities law, industry news and more since 1994.