The Ontario Securities Commission (OSC) has filed allegations against Troy Richard James Hogg and affiliated companies in relation to an offering of crypto security tokens that raised US$51 million from investors.
The OSC alleges that from May 2017 to June 2019, Hogg, an Ontario resident, and his companies Cryptobontix Inc., Arbitrade Exchange Inc. and Arbitrade Ltd. promoted and sold a crypto asset named Dignity token (formerly Unity Ingot) to investors around the world.
According to the allegations, Hogg and his companies defrauded investors with false and misleading statements in promotional materials. These statements included false claims that gold bullion supported the value of Dignity tokens.
The OSC alleges that Hogg and his companies further defrauded investors by diverting and depleting a significant amount of invested funds for purposes unrelated to the crypto security tokens, such as purchasing real estate and making payments to companies controlled by Hogg.
The OSC also alleges that, contrary to Ontario securities law, Hogg and his companies did not file a prospectus with respect to the distribution of the Dignity token and did not obtain the necessary registration with the OSC to engage in trading activities.
The OSC acknowledges the assistance provided in this investigation by the U.S. Securities and Exchange Commission (SEC), which conducted a parallel investigation of this matter. Today, the SEC announced charges filed in the United States District Court Southern District of Florida against Hogg and several U.S. residents.
A copy of the Statement of Allegations is available on the website of the Capital Markets Tribunal.
The mandate of the OSC is to provide protection to investors from unfair, improper or fraudulent practices, to foster fair, efficient and competitive capital markets and confidence in the capital markets, to foster capital formation, and to contribute to the stability of the financial system and the reduction of systemic risk. Investors are urged to check the registration of any persons or company offering an investment opportunity and to review the OSC investor materials available at http://www.osc.ca.
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