Foreign governments say hundreds of thousands of people in Bangladesh and Sri Lanka lost savings to Metaverse Foreign Exchange, headquartered in Canada.
Now, an investigation from the Investigative Journalism Foundation and CTV News shines new light on how Canadian shell companies and registries were used to pull off the scheme.The investigation — based on dozens of corporate filings, interviews with experts and both domestic and international court records — found MTFE was part of a network of dozens of Canadian shell companies peddling similar cryptocurrency investment schemes.
Four of Lane’s companies were dissolved by Canadian officials for non-compliance in May, shortly after the IJF and CTV News contacted the federal department that runs the corporate registry seeking comment for this story. MTFE’s website claimed to use artificial intelligence to trade foreign currencies on behalf of users, offering steady, gradual gains with little effort and low risk.“I thought that Canada should have strict regulations and that it should have good regulations around setting up a company and doing trading,” said Arif, who asked his full name not be used.
Bangladesh’s Criminal Investigation Department — which didn’t respond to repeated requests for comment — told local media as many as 500,000 people in the country may have lost money.quoted said the equivalent of US$1 billion was stolen from investors there, citing the country's central bank. The bank declined to comment for this story, citing the ongoing investigation.
In August 2023 -- shortly before the scheme collapsed -- Sri Lanka’s central bank began an investigation into local companies set up to promote MTFE. The rest, investigators said, was kicked up to the “parent company” in Canada in the form of a “service fee.” Investigators said MTFE software that investors like Arif had used did not seem to work and had been “inactive since the beginning of this inquiry.”In a statement, Binance spokesperson Carolina Matos said the company “was made aware of the MTFE scam by one of our trusted law enforcement partners” in August 2023. She said Binance was “unable to provide details of the case due to ongoing investigations.
The country’s restrictive securities trading regime means Bangladeshis have relatively few legitimate ways to invest.'I ... thought I wouldn't fall for a scam like this' At one time, this one office unit in Markham was home to 97 different money services companies, including 95 registered foreign currency exchanges .
The shared office space has about 650 clients registered at its Markham location. The manager told CTV News that “90% of are good legitimate businesses, there’s 10% of that group that are not, and once we find out we shut them down, we stop accepting mail on their behalf and we close out their account.”Money services businesses are a type of business that offers financial services like wire transfers, cryptocurrency exchange or foreign currency exchange.
“A lot of them are Ponzi schemes related to crypto and foreign exchange and other high-yield investments or high-yield investment products,” Iuso said. The unit at 500-7030 Woodbine Avenue is operated by IWG Plc., a British holding company that provides office services under the name of Regus . They own and operate 4,000 locations across the globe.
In the report, which the IJF and CTV obtained via access to information legislation, Fintrac asked the Ministry of Finance to give it new tools to revoke registrations from “unscrupulous operators” and to address “exploited weaknesses.” That is the address of Raydwell Consulting, a Richmond “business service provider” whose website markets “virtual addresses” and dedicated phone lines for registered companies.
Peter German, a former RCMP deputy commissioner and the author of two reports on money laundering in British Columbia, says the incident shows the limits of Fintrac’s mandate and authority. “We do have more work to do here in Canada, both in terms of ensuring we have the tools we need to crack down on fraud and money laundering and also that enforcement agencies across the country are doing their jobs,” Freeland said.As of April, Arif said he had finally finished paying back his parents for the money he lost on MTFE. It didn’t come easily: he had to cut back on almost all his expenses, he said, and miss out on time he would normally spend with friends.