B.C. blockchain company misled investors, regulator alleges

The B.C. Securities Commission logo in an undated file photo.

A Vancouver-based blockchain technology investment company and three of its officers are accused of misleading the public about how much money it had raised from private investors in 2018.

The allegations from the British Columbia Securities Commission – the province's financial markets regulator – have not been proven.

According to the BCSC, BLOK Technologies Inc. issued a news release in 2018 saying that it had raised approximately $5.4 million through a private placement. The company did not disclose, however, that it owed approximately $4.4 million in consulting fees, meaning it would retain less than $1 million – or 18 per cent – of the total amount raised.

"The BCSC alleges that BLOK, which traded on the Canadian Securities Exchange, made a statement to investors that it knew, or ought to have reasonably known, was a misrepresentation to investors and violated the Securities Act," the commission said in a statement Thursday.

The allegations also extend to BLOK's president and CEO Robert Earle Dawson, its vice president and director James Joseph Hyland, and its chief financial officer David Malcolm Alexander, all of whom the BCSC alleges "authorized, permitted or acquiesced" to the misrepresentation.

The accused parties are required to appear at the BCSC's offices on Oct. 13 if they wish to be heard before a hearing is scheduled on the matter.