Blockchain-Startup CEO Settles With Canadian Regulators Over Misleading Content
Alex Tapscott, the co-founder of the blockchain company NextBlock, has reached an agreement with the Ontario Securities Commission after producing “misleading content”. Per the report by The Globe and Mail on May 13, 2019, the entrepreneur, aside paying the sum of $300,000 as penalty fine, will also be giving lectures on ethics to Canadian business schools.
Second Chance for Indicted NextBlock CEO
Alex Tapscott, co-author of the blockchain book – “Blockchain Revolution: How the Technology Behind Bitcoin Is Changing Money, Business, and The World”, recently reached an agreement with the Ontario Securities Commission (OSC) to pay the penalty fine of $300,000 and present a lecture on business ethics to three Canadian business schools.
Commenting on the matter, Tapscott seemed to have come to terms with his mistakes and learned lessons. The CEO said:
“We are happy to be putting this matter behind us. I have learned a lot from this process. I am deeply grateful to our investors for their patience and support, and happy they all prospered.”
The OSC started its investigations following a Forbes revelation back in 2017. According to the report, Tapscott misled over 100 investors after showing them a slide deck containing names of advisors including four prominent cryptocurrency and blockchain personalities.
However, the four cryptocurrency heavyweights in question – Kathryn Haun, a board member of Coinbase; Karen Gifford, Special adviser at Ripple; Vinny Lingham, CEO of Civic; and Dmitry Buterin, BlockGeeks founder and father of Vitalik Buterin, stated that they never agreed to perform advisory roles for the Toronto-based company.
Following the revelation by the report, NextBlock Global decided to return the $20 million CAD already received from 113 investors in a private offering. Asides from refunding investors, the firm halted an intending “go-public transaction”.
As a form of penance for his actions, Tapscott also wrote an open letter detailing the outcome of his misconduct. The letter would be published in a national publication under a week. Furthermore, Tapscott’s ethics lecture would run for 18 months in three Canadian business schools.
Despite the bad press surrounding Tapscott and NextBlock, some early investors commended the CEO’s honesty on the matter and stated that they would still invest in the company.
Cryptocurrency-related Investment Fraud
Some cryptocurrency and blockchain companies are known to sell misleading content to unsuspecting investors. Various regulatory bodies, however, have succeeded in arresting such firms and their owners.
As reported by BTCManager, a group of virtual currency enthusiasts had plans to sue early bitcoin investor, Roger Ver. According to the complainants, Ver was using the name “Bitcoin” to sell to naïve investors on his Bitcoin.com website.
Also, Nvidia faced a class action lawsuit for sharing misleading information to shareholders regarding a fall in demand for graphics cards.