Securities regulator warns about digital currency targeting Nova Scotians

The Nova Scotia Securities Commission is warning investors that Bitcoin Bank/Bitcoin-bank.io is not registered to sell securities in Nova Scotia, but that's only the first of many red flags the company is raising.

Warning from Nova Scotia Securities Commission follows similar ones issued in New Brunswick, Manitoba

One of the red flags for Bitcoin Bank is that it doesn't actually operate from the California address it cites on its website. (Shutterstock)

The Nova Scotia Securities Commission is warning investors that Bitcoin Bank/Bitcoin-bank.io is not registered to sell securities in Nova Scotia, but that's only the first of many red flags the company is raising. 

According to the company's website, it's in the midst of an initial coin offering for its digital currency.

"The highest red flag is they're not registered in Nova Scotia, so we have no confirmation about who they are, who's running this business and what they're offering is actually legitimate," said commission spokesperson David Harrison.

Some of the other red flags are that the company says it will accept Visa, MasterCard and wire transfer for payment.

"When you send the money that way, it's very difficult to get it back. It's not a way we would recommend anyone charge an investment," said Harrison.

The wording on Bitcoin Bank's website raises red flags because of its use of works like 'fast,' 'simple' and 'no fees,' in addition to spelling mistakes. (bitcoin-bank.io)

The warning from the securities commission follows similar ones issued in New Brunswick and Manitoba.

Harrison said the company has been running ads online directed toward people in Nova Scotia.

He said the use of phrases like "fast," "no fees" and "simple" are worrisome because they give the impression the investment is one that will quickly make people money.

As well, the site touts that its "algorithms diversify the investments to eradicate risks."

"There's never an investment that involves no risk," said Harrison.

Digital currencies attractive to fraudsters

According to the Manitoba Securities Commission, the company does not operate from the California-based address that it lists on its site. As well, the images and biographies of its executive team are also fakes.

Harrison cautions that digital currencies are appealing platforms for fraudsters to take advantage of.

"It's really the hot new thing in the news when it comes to investing or money, so whenever that happens, a lot of the people that are involved in frauds or scams see that as the new thing and jump all over it," he said.