Manitoba Securities Commission Fraud Prevention

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Alerts & Cautions

INVESTOR ALERT: XATRA CORPORATION

Posted: May 22 2018

FOR IMMEDIATE RELEASE
May 22, 2018


Cryptocurrency Site Not Xactly a Safe Investment

Winnipeg - The Manitoba Securities Commission (MSC) is issuing a warning to Manitobans about XATRA CORPORATION – A cryptocurrency company allegedly operating in Malta, advertising so-called guaranteed investment returns on Manitoba classified websites.

 

Xatra claims on its site to be, “The new 2018 crypto currency that will guarantee you a safe investment,” and promises, “An annual return of approximately 100%.” Guarantees of high returns and low risk are one of the most common red flags of investment fraud.

 

Prior to launching a new cryptocurrency, a document called a ‘White Paper” is normally prepared in order to detail the commercial, technological and financial specifications of a new or Initial Coin Offering (ICO). Xatra’s confusing white paper is also a cause for concern.

 

“We found the Xatra ICO being advertised online to Manitobans”, says Jason Roy, Senior Investigator with the MSC. We became concerned after reviewing the website and the White Paper.  Not only was it confusing and contained numerous spelling mistakes, it also promised an eight per cent per month return with no risk. When we contacted Xatra regarding the vague disclaimers and inconsistencies on their website, we could not get a straight answer.”

 

Following an investigation, MSC has released an Investor Alert naming www.xatra.io, Xatra Coin, and XATRA CORPORATION. XATRA is not, and has never been, registered to trade securities in Manitoba.

 

The company claims also to be operating in Malta, but has an Estonian phone number.

 

This alert has been issued as part of the North American Securities Administrators Association (NASAA) “Operation Cryptosweep” an international crackdown on potentially fraudulent ICOs and cryptocurrency-related investment products, involving more than 40 provincial and state securities regulators in Canada and the United States. MSC is a member of NASAA.

 

A critical component of “Operation Cryptosweep” is raising public awareness of the risks associated with ICOs and cryptocurrency-related investment products, including:

 

• Potential for Fraud: Due to their very nature, ICOs are fertile ground for fraud.


• It’s Volatile: Cryptocurrency prices rise and fall dramatically, often driven only by media hype. There are few constraints on price manipulation.


• It’s Vulnerable: Online wallet companies and exchanges are susceptible to cybersecurity threats and hacking, putting your deposits at risk.


• Lack of reliable information: Unlike an Initial Public Offering (IPO), there are no formal disclosure requirements such as who is behind the ICO and how the money raised will be spent.


• High failure rate: Many ICOs are based on an idea, not a proven business model.


• Obscurity: It’s hard to make informed decisions about value without financial statements or other traditional assessment criteria to rely on.

 


MSC suggests potential investors follow some basic advice.

 

“As an investor, ask yourself, ‘Do I really understand how this works, and how would this fit with my overall long-term investment strategy?’” says MSC Education and Communications Manager Ainsley Cunningham. “A very high percentage of ICOs fail in the first year, and many are fraudulent. Even the legitimate products can be high-risk, and definitely not suitable for everyone. Take time to do your homework before you invest. Start by checking an individual or company’s registration at aretheyregistered.ca.”

 


Members of the public are advised to contact MSC if they believe they have been targeted by any type of investment fraud attempt. MSC’s anti-fraud line is 1-855-FRAUD-MB.

 

The public can also visit recognizeinvestmentfraud.com for more information on common investment frauds and scams.

The Manitoba Securities Commission is a division of the Manitoba Financial Services Agency, a Special Operating Agency of the Government of Manitoba that protects investors and promotes fair and efficient capital markets throughout the province.

 

Organized in 1919, the North American Securities Administrators Association (NASAA) is the oldest international organization devoted to investor protection. NASAA is a voluntary association whose membership consists of 67 state, provincial, and territorial securities administrators in the 50 states, the District of Columbia, Puerto Rico, the U.S. Virgin Islands, Canada, and Mexico.

 


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Media Inquiries:
Jason Booth, Communications Coordinator, MSC |  204.945.1660 |  jason.booth@gov.mb.ca