Kelowna man ordered to pay $70K to the B.C. Securities Commission for using investor funds | iNFOnews | Thompson-Okanagan's News Source

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Kelowna man ordered to pay $70K to the B.C. Securities Commission for using investor funds

A sign advertises a Bitcoin automated teller machine, ATM, at a shop in Halifax on Wednesday, February 4, 2020.
Image Credit: THE CANADIAN PRESS/Andrew Vaughan
May 02, 2021 - 12:47 PM

A man who raised money for the development of a blockchain platform has agreed to pay $70,000 to the British Columbia Securities Commission for using funds he raised from investors for personal purposes.

Francesco Servedio, from Kelowna, received $3.2 million from investors between March 2015 and July 2017 to develop a blockchain platform that would use a new cryptocurrency. The cryptocurrency, which could be exchanged for bitcoin, was used as a form of payment by a limited group of merchants, according to a press release from BC Securities Commission.

The commission said Servedio used $480,000 of the invested funds for personal purposes. When the funds were invested, he did not indicate that he would use the money for personal purposes, which violates the Securities Act’s provision on misrepresentation.

"When the platform stopped operating in 2017, Servedio was able to return nearly the full amount of the original funds raised to investors because the price of bitcoin had risen during this period," according to the release.

In addition to the immediate payment, Servedio is prohibited for 10 years from relying on an exemption in the act, regulations or a decision, becoming or acting as a director or officer of an issuer or registrant, becoming or acting as a registrant or promoter, advising or acting in a management or consultative capacity in the securities or derivatives market and engaging in promotional activities by, or on behalf of, an issuer, security holder or party to a derivative, or someone who could reasonably benefit from the promotional activity.

The British Columbia Securities Commission is the independent provincial government agency responsible for regulating capital markets in British Columbia through the administration of the Securities Act. Our mission is to protect and promote the public interest by fostering a securities market that is fair and warrants public confidence.

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