The OSC says the case underscores the consequences of misleading claims
The executive director and board chair of a cryptocurrency startup has been sentenced to six months in jail following a securities fraud conviction stemming from a scheme that wiped out investments from dozens of Ontario residents.
The Ontario Securities Commission (OSC) announced on Monday that Stephan Katmarian, executive director, managing director and board chair of Peblik Inc., and a resident of Mississauga, Ont., had been sentenced under s. 126.1 of the Securities Act. He will serve 18 months of probation upon release.
According to the announcement, Peblik sold investors notes convertible into a proposed digital asset called the Peblik Token — a token that was never launched. The company promoted the investment by falsely claiming the token’s value was backed by the Thierry Mine, a large inactive copper mine in Northern Ontario. Investors were misled into believing the tokens were backed by Peblik’s interest in the mine, when in fact the company had no valid ownership stake in the asset. Katmarian was aware of, and responsible for, these misrepresentations in company materials.
Between Jan. 1, 2018, and Aug. 8, 2019, Peblik raised approximately $480,000 from 32 investors, all of whom lost their money. The company had previously told the OSC that no sales had been made to Ontario residents.
Appeal raises legal questions
The case followed a lengthy legal process. The Ontario Court of Justice initially found Katmarian not guilty on all four charges, including fraud, misleading investors, unregistered trading and illegal distribution. The OSC appealed three of the four acquittals. The Ontario Superior Court of Justice upheld two acquittals but set aside the acquittal on the fraud charge, ruling that the trial judge had erred by requiring the OSC to prove that investors’ losses were caused by reliance on a specific false statement. A conviction was entered on June 20, 2025, without ordering a new trial. Katmarian was sentenced on May 11, 2026.
The Ontario Court of Appeal has since granted Katmarian leave to appeal the conviction, noting the case will provide an opportunity to clarify whether a 2024 Supreme Court of Canada ruling changes the criteria appellate courts must consider when entering a conviction under Ontario’s Provincial Offences Act.
Bonnie Lysyk, executive vice-president of enforcement at the OSC, said the outcome sent a clear message.
“This decision is a strong reminder that making false claims about the financial backing of assets is fraud. It harms investors, damages confidence in Ontario’s capital markets, and has serious consequences,” Lysyk said. “The OSC will continue to take action as we work hard to curb fraud and hold those responsible to account for their actions.”
The charges were investigated by the OSC’s Criminal Investigations & Prosecutions team, a unit within the regulator’s Enforcement Division that handles securities-related fraud, market manipulation and related misconduct. The OSC urged investors to verify the registration of any person or company offering an investment opportunity.
The Peblik case comes as Canadian regulators continue tightening oversight of the digital-asset sector. In February, the Canadian Investment Regulatory Organization (CIRO) released a Digital Asset Custody Framework establishing expectations for how registered crypto trading platforms safeguard customer assets. CIRO said custody remains one of the most significant risks in the crypto ecosystem and that clearer standards are intended to strengthen investor protection.
