News Release

Vancouver – The BC Securities Commission (BCSC) is warning investors about crypto tokens that are supposedly backed by the presence of minerals, such as gold, for which there are no plans to mine physically.

Issuers of these crypto assets often claim to be “tokenizing” the “mineralization” at a particular site or sites. The digital tokens are securities purporting to allow investors to buy, hold and transfer interests in the minerals at a particular site through blockchain-based technology. These issuers may refer to technical reports, mineral resource estimates, or National Instrument 43-101 Standards of Disclosure for Mineral Projects.

However, issuers of these crypto assets do not have any intention to extract or process those deposits, now or at any time.

Investors should understand that the existence of a technical report does not mean that a mineral deposit has economic value. A mineral resource is a concentration of material for which there are reasonable prospects for eventual economic extraction. Without an assessment of the technical and economic viability of extraction or a plan to mine the underlying material, there is no way to know if there are reasonable prospects for eventual extraction, so there cannot, by definition, be a mineral resource and it cannot be assigned economic value.

Investors should be cautious about offers on websites or other online communications that use terms such as:

• In-situ gold tokenization
• Keeping-It-in-the-Ground tokenization
• Tokenized gold in the ground
• Unmined gold investment tokens
• Tokenized mineral deposits
• Tokenized mining assets

As with any investment, investors should carefully consider the risks where promotional activity:

• Describes a digital token or other security as being "backed” by gold or other minerals that will remain in the ground,
• Suggests that an unmined mineral deposit, or a related crypto asset, has a value, or gives rights comparable to owning physical gold or other minerals that have been recovered, or
• Implies that technical reports, resource estimates, disclosure under NI 43-101, or the involvement of named geologists or engineers, is evidence that a crypto asset has value.

If you have concerns about a promotion, contact the BCSC’s Contact Centre.

About the BC Securities Commission (bcsc.bc.ca)

The BC Securities Commission, an independent provincial government agency, strives to make the investment market benefit the public. We set rules, monitor compliance by industry, take action against misconduct, and provide guidance to investors and industry. As guardians of B.C.’s investment market, we’re committed to maintaining a market that is honest, fair, competitive and dynamic, enabling British Columbians to thrive.  

Media Contact:
Elise Palmer
604-899-6830

Public inquiries:
604-899-6854 or 1-800-373-6393 (toll free)
inquiries@bcsc.bc.ca

Learn how to protect yourself and become a more informed investor at www.investright.org