OSC secures crypto fraud conviction after 32 investors lost approximately $484,000
A crypto token founder convicted of securities fraud over false mining claims won the right to appeal that conviction on April 10, 2026.
In Ontario Securities Commission v. Katmarian, 2026 ONCA 266, the Court of Appeal for Ontario granted Stephan Katmarian leave to appeal his fraud conviction under the Securities Act.
Katmarian was the founder, executive director, chair, and managing director of Peblik Inc., which marketed a cryptocurrency token to investors. The Ontario Securities Commission alleged that Peblik told investors the token was secured by the company's interest in the Thierry Mine, a copper mine in northern Ontario. Peblik had no such interest.
A 16-day hearing before the Ontario Court of Justice established that the representations on Peblik's website and in its marketing documents were deceitful or a falsehood. It was undisputed that 32 individuals who invested a combined total of approximately $484,000 in Peblik tokens lost their entire investment.
The trial judge nonetheless acquitted Katmarian. She held that, to prove the actus reus of fraud, the OSC had to show that investors suffered an actual deprivation or loss as a result of their reliance on a misrepresentation. The OSC had not proven that investors were induced to buy Peblik tokens by any particular false statement about the company's interest in the Thierry Mine on Peblik's website or in its marketing documents.
Katmarian was acquitted at trial of four violations of the Securities Act. The OSC appealed three of those acquittals to the Superior Court of Justice. The appeal judge upheld two of them but set aside the acquittal on the fraud charge. He found that the trial judge had erred: the deprivation element of criminal fraud may be established either by proof that an actual loss was induced by a prohibited act or by proof that the prohibited act placed a victim's pecuniary interests at risk.
The Superior Court found that the existing trial findings were sufficient to support a conviction. Peblik had falsely represented that the token was backed by a real-life asset, placing investors' pecuniary interests at risk. Katmarian had known that Peblik had no interest in the Thierry Mine and had known that the misrepresentation put investors at risk. A conviction was entered without ordering a new trial.
The Court of Appeal denied Katmarian leave to appeal on the causation question, finding that the legal principles on this point were neither novel nor controversial. Leave was granted only on the question of whether R. v. Hodgson, a 2024 Supreme Court of Canada decision, modifies the test for entering a conviction on appeal in the context of a prosecution under the Provincial Offences Act.
