A Canadian company called Dominion Bitcoin Mining has been exonerated of soliciting investors without proper registration. The government of Saskatchewan, Canada’s Financial Consumer Affairs Authority (FCAA) ruled that the website that allegedly was in violation of Canadian law was not active and that it did not sell any shares to investors.
A co-founder of the mining company now plans to sue the regulator for libel, according to the Globe and Mail in Toronto.
FCAA staffers charged that Dominion’s directors offered securities without proper registrations, according to an FCAA decision dated Oct. 22, 2015. The decision named directors at the time of the company’s incorporation: Jason Edmund Dearborn of Regina, Saskatchewan; Peter Scott Voldeng of Saskatoon, Saskatchewan; and Ronald James Frederick Gibbon of Edmonton, Alberta.
The evidence presented during a hearing included screen captures taken from Dominion’s website. Harvey White, an FCAA investigator, presented information he found on the website during April of 2014. One page listed 10 provincially-held entities that were 90% owned by Dominion: Grasslands Bitcoin, Red River Bitcoin, Algonquin Bitcoin, Bitcoin Nationale, Grand Banks Bitcoin, New Scotland Bitcoin, Acadian Bitcoin, GreenGables Bitcoin, Rocky Mountain Bitcoin, and Pacific Bitcoin.
Another page on the website said that by taking Dominion’s offering, a purchaser owns a share of these companies that allow the purchaser an equal part in every bitcoin Dominion mines and that Dominion will not use any of the bitcoin without shareholder consent.
Another page on the website said Dominion was accepting investors from all 10 provinces.
On May 7, 2014, FCAA called for an investigation and White interviewed individual respondents and recorded the interviews. Respondents objected to admitting recordings of these interviews. A panel hearing the objection ruled to admit the recorded interviews as evidence.
The respondents argued that the website was not live, was under construction and was supposed to be password protected and encrypted. The website at the time did not reflect the project’s status and there were no securities to sell and the corporations mentioned did not exist, the respondents claimed.
The FCAA panel said two days before the website screen captures, the content of some of the pages appeared to have been encrypted. The panel also noted that if sections of the website were not password-protected and encrypted, this was not intentional.
The panel further noted that no securities were sold, that no public member subscribed, that no shares were created for sale, and that the respondents did not have a clear picture of what an investor would be investing in.
The panel ruled on Oct. 22, 2015, that an offering of shares did not exist at material times and the parties did not engage in any breach of the law.
Jason Dearborn, a co-founder of the company and a former Saskatchewan party MLA, said he will sue the Saskatchewan regulator for libel, according to the Toronto-based Globe And Mail. He said he is pursuing other action for alleged violations of the Charter of Rights and Freedoms he claimed took place during interviews with investigators.
Dearborn also claimed his company’s website was only accessible to investigators because it had been hacked.
Images from Shutterstock and FCAA.