The B.C. Securities Commission says an Okanagan man has agreed to pay $70,000 to the Securities Commission for using funds he raised from investors for personal purposes.
According to the Securities Commission (BCSC), Francesco Servedio of 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 BCSC said the cryptocurrency, which could be exchanged for Bitcoin, was used as a form of payment by a limited group of merchants.
“Servedio used $480,000 of the invested funds for personal purposes,” said the BCSC. “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.”
Further, the BCSC said, “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.”
The BCSC said the platform was developed and operated successfully for a period of approximately two years.
In addition to the $70,000, the BCSC said Servedio is prohibited for 10 years from:
- relying on an exemption in the Securities 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 B.C. Securities Commission is an independent provincial government agency that’s responsible for regulating capital markets in British Columbia. More information about the BCSC is available on their website.