Hogg and his companies—Cryptobontix, Arbitrade Exchange, TJL Property Management Inc., and Gables Holdings—were found to have violated Ontario’s Securities Act. The Tribunal ruled that the fraudulent offering of a cryptocurrency asset called Dignity, falsely claimed to be backed by gold, was at the center of the scheme.
Severe Financial Penalties
The Tribunal ordered Arbitrade Bermuda, a related entity, to return US$41.6 million, with Hogg and Cryptobontix jointly liable for US$7.8 million. Additionally, Hogg was directed to pay US$10.1 million in investor funds. Further penalties include $2.5 million in administrative fines to the Ontario Securities Commission (OSC) and $667,605.27 in legal costs.
The decision also imposed a lifetime ban on Hogg and his companies from trading securities and prohibited Hogg from serving as a director or officer of any securities issuer.
Allegations of Bias
Hogg has rejected the Tribunal’s findings, alleging the proceedings were biased. In a text message exchange on December 22, he stated, “The investigators, lawyers, adjudicators, and hearings were all out of the same office.” He also criticized the low odds of winning against the OSC, saying, “Almost all attorneys said rarely anyone beats the OSC. I wonder, why?”
Hogg further accused the OSC of selectively enforcing the Securities Act, questioning whether the regulator applies the same scrutiny to other cryptocurrencies and trading platforms. “What makes those cryptocurrencies different than ours?” he asked.
Tribunal’s Strong Words
The Tribunal described the fraud as “particularly egregious,” labeling the securities offering “a total sham.” It also dismissed Hogg’s written statements of regret, finding them insincere and lacking accountability. “We do not interpret his statements as accepting his own responsibility for harm caused. They instead express regret for having listened to and become involved with other unnamed bad actors,” the Tribunal wrote in its decision.
Legal Troubles in the United States
Hogg, along with Cryptobontix and Arbitrade, is also facing separate charges from the U.S. Securities and Exchange Commission (SEC) for related violations.
While Hogg maintains his innocence, the penalties mark a significant turning point in the OSC’s crackdown on fraudulent cryptocurrency schemes in Ontario. The appeal process is expected to add further scrutiny to a case that has already shaken investor confidence in the digital asset market.
