The Financial and Consumer Affairs Authority (FCAA) of Saskatchewan, Canada, has cleared a bitcoin startup of breaching securities law.
Its statement reads:
"It is the determination of that Panel that, notwithstanding the initially apparent validity of the allegations of the FCAA staff, an offering of shares did not at material times exist, and the parties did not engage ... in any breach of the provisions of the Act [The Securities Act, 1988]."
The decision follows a 17-month dispute over claims Dominion's founders – Jason Dearborn, Peter Voldeng and Ronald Gibbonthe – had offered securities from their website, dominionbitcoin.com.
During a FCAA hearing, investigator Harvey White presented screenshots from the site, including a page that read: "By taking part in our offering, you own a share in one of ten provincial companies that own Dominion. That share allows you an equal part in EVERY SINGLE BITCOIN WE EVER MINE."
Another section of the website stated Dominion was accepting "sophisticated" investors from the 10 provinces that make up Canada.
However, the respondents argued that their website was under construction at the time (they allege encrypted data was exposed following a hack) and did not accurately reflect the project's status. In fact, the corporations mentioned on the site did not yet exist – and there were no Dominion securities to sell.
As a result, the founders were cleared. "The Respondents had no clear picture of what an investor might be investing in," the FCAA's document reads.
At this point, little is known about Dominion beyond its name. "We're expecting to actually develop the largest bitcoin mine in Canada," President Voldeng told CBC News last September, while plans to trade the currency are reportedly in the works.
The company – whose domain is now disconnected – said it is unlikely to operate in Saskatchewan. Voldeng said it is also planning to sue the FCAA for libel.
While Dominion has been cleared of all allegations, other bitcoin schemes have been revealed to be highly profitable scams.
Last month, US resident Trendon Shavers plead guilty to securities fraud, having received approximately $4.5m while operating the Bitcoin Savings & Trust (BS&T).
The organisation, which was investigated by the US Securities and Exchange Commission (SEC) in 2013, promised investors 7% returns on bitcoin arbitrage in 2011 and 2012.
Hat Tip: The Globe and Mail
Saskatchewan River image via Shutterstock