The British Columbia Securities Commission has warned investors about crypto tokens purportedly backed by gold or other minerals that issuers have no intention of extracting or processing. These tokens are securities promoted as allowing investors to buy, hold and transfer interests in mineral deposits through blockchain technology. Technical reports and mineral resource estimates do not, by themselves, establish that the underlying deposits have economic value. A mineral resource must have reasonable prospects for eventual economic extraction. Without an assessment of extraction’s technical and economic viability or a mining plan, those prospects cannot be established, and the material cannot be classified as a mineral resource or assigned economic value. Investors should be cautious of promotions that portray interests in unmined deposits as comparable to ownership of recovered physical gold or other minerals. The warning also flags claims that technical reports, disclosure under National Instrument 43-101 Standards of Disclosure for Mineral Projects, or the involvement of named geologists or engineers demonstrate that a crypto asset has value.
British Columbia Securities Commission warns investors about crypto tokens tied to mineral deposits with no mining plans
The British Columbia Securities Commission has cautioned investors about crypto tokens linked to mineral deposits that issuers have no plans to mine. Technical reports alone do not establish economic value, and a mineral resource must have reasonable prospects for eventual economic extraction. Investors should scrutinize promotions that equate these tokens with ownership of physical gold or cite technical disclosure and professional involvement as proof of value.