Order: In the Matter of First Class Crypto Inc.et al.

Order
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IN THE MATTER OF
FIRST CLASS CRYPTO INC., JOHNATHAN HARRIS, MITCHELL CARNIE and NEILL KLOSS

 File No. 2022-11

Adjudicator:     M. Cecilia Williams

    July 6, 2022

ORDER

(Section 17 of the Securities Act, RSO 1990, c S.5)

WHEREAS the Capital Markets Tribunal held a hearing in writing to consider an application by Staff of the Ontario Securities Commission for an order permitting Staff to disclose certain information pursuant to section 17 of the Securities Act (the Act) to the Ministry of the Attorney General’s (MAG’s) Director of Asset Management – Civil;

ON READING the materials filed by Staff on April 26, 2022 and the supplemental materials filed by Staff on June 17, 2022;

IT IS ORDERED that:

  1. pursuant to section 5.1 of the Statutory Powers and Procedures Act, RSO 1990, c S.22 and Rule 23 of the Tribunal’s Rules of Procedure and Forms, this application is heard in writing;  
  2. pursuant to subsection 17(1) of the Act, Staff is authorized to provide to MAG’s Director of Asset Management – Civil, and/or any other person appointed under the Civil Remedies Act, 2001, SO 2001, c 28 or employed by MAG for the purpose of carrying out duties relating to the compensation of persons who suffer pecuniary or non-pecuniary loses as a result of unlawful activities:
    1. The following excerpts of the transcript of the compelled examination of Neill Kloss dated September 4, 2019:
      1. page 26 at lines 7-15;
      2. page 54 at lines 1-22;
      3. page 61 at lines 19-25;
      4. page 62 at lines 1-8;
      5. page 97 at lines 21-25; and
      6. page 98 at lines 1-12;   
    2. Investor identification and contact information, investor listing, investment contracts and deposit receipts;
    3. FCCI contract termination and promissory note documents;
    4. E-transfer confirmation, bank account statements, transaction listings, wire forms and other banking documents of Johnathan Harris, Mitchell Carnie and 2582610 Ontario Inc. (operating as CryptoConnect, the cryptocurrency exchange); and
    5. Text messages and e-mail correspondence between FCCI representatives as well as between investors and FCCI representatives;
  3. pursuant to subsection 17(2.1) of the Act, such disclosure is authorized to be made without notice and without and opportunity to be heard;
  4. pursuant to subsection 17(4), MAG Staff is permitted to use the information set out in paragraph 2 of this Order for the purpose of notifying any potential victims in this matter of their entitlement to make a claim under the CRA and to assist an adjudicator appointed by the Lieutenant Governor in Council in adjudicating any such claims; and for no other purpose;
  5. except as expressly provided in paragraphs 2 and 4 of this Order, the information contained in paragraph 2 of this Order shall continue to be subject to the confidentiality provisions of section 16 of the Act; and
  6. pursuant to subsection 2(2) of the Tribunal Adjudicative Records Act, 2019, SO 2019, c 7, Sch 60, and Rule 22(4) of the Rules, the supplementary affidavit of Ivy Richmond, sworn June 16, 2022, shall be kept confidential.   

 

“M. Cecilia Williams”
M. Cecilia Williams