The British Columbia Securities Commission (BCSC) has suspended BLOK Technologies Inc., a Vancouver-based blockchain investment company, from trading or purchasing securities and derivatives and engaging in promotional activities for eight years.
The decision follows the company's involvement in misrepresentation related to a misleading news release. In 2018, BLOK Technologies issued a news release claiming to have raised approximately $5.4 million through a private placement. The release stated that the funds would be used to advance the company’s blockchain investment projects, evaluate new blockchain opportunities, and support working capital. It suggested that this financing would significantly boost the company's business model execution. However, the release omitted the fact that nearly $4.4 million of the raised funds would be allocated towards consulting fees.
BLOK Technologies is currently under a cease trade order for failing to file financial statements and is in the process of being dissolved. The company formerly traded on the Canadian Securities Exchange and did not participate in the sanctions process.
A BCSC panel emphasized the potential risk of BLOK reviving itself and resuming trading, declaring the company "not fit to participate in the capital markets." The panel criticized BLOK for failing to provide the public with accurate and complete information essential for informed investment decisions. This intentional omission, the panel noted, undermines investor confidence in public markets.
"The company failed in its obligations to ensure that the public had accurate and complete information in order to make informed investment decisions," the panel stated. "This failure was intentional and would naturally reduce the confidence which investors have in public markets."
The panel did not impose a monetary penalty, as the executive director did not request one, and it is likely that BLOK will soon dissolve without any remaining assets.
The BCSC continues to monitor the situation and enforce regulations to ensure the integrity of the market. Investors are encouraged to stay informed and conduct due diligence when making investment decisions.