Startup paid $100,000 fine for trading approximately $26 million of securities while unregistered.
Vancouver-based fractional real estate investment platform Addy has officially become an exempt market dealer (EMD) after being fined by the British Columbia Securities Commission (BCSC) for trading securities as an unregistered business.
An EMD is a registered dealer permitted to trade private securities not subject to the same rules as a publicly traded company, but still accountable to regulation.
The company announced that it is now an EMD in British Columbia and all passport jurisdictions in a blog post earlier this week, calling it a “turning point” after years of discussion with the BCSC. Co-founder and CRO Stephen Jagger told BetaKit that the registration allows Addy to operate in every jurisdiction in Canada except Ontario, which has its own process and the company is currently working to register with.
Addy said the newfound regulatory status will make its transactions faster and more efficient, as well as help it expand its offerings to include equity, debt, and real estate funds.
Addy voluntarily provided information and made admissions to regulators, BCSC said.
While transactions previously had to flow through third-party EMDs, Jagger said Addy can now act as its own registered dealer with compliance measures integrated into its platform, avoiding its users being redirected to third-party sites. He added that Addy’s new offerings are “happening very soon” and expected to roll out progressively.
Founded in 2018 by Jagger and CEO Mike Stephenson, Addy allows retail investors to purchase a share of real estate on its platform for as little as one dollar. The approach aims to democratize access to real estate investments, which are traditionally limited to high-net-worth or institutional investors due to the high capital requirements. The company’s website claims it holds a total asset value of more than $1.3 billion across more than 50,000 Canadians.
Earlier this month, the BCSC revealed that Addy paid a $100,000 fine for trading approximately $26 million of securities without being registered as an EMD between 2018 and 2025, an average of $700 per investor.
The BCSC said Addy triggered the requirement to register by soliciting investments and intermediating securities trades, and by receiving compensation from the fees for its platform. The BCSC said that Addy attempted to justify exemption because it used crowdfunding and EMD partners to facilitate trades, but that those exemptions were not applicable.
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“Addy, which has no prior history of securities regulatory misconduct, voluntarily provided information to BCSC investigators and made admissions to them, thus avoiding a Notice of Hearing,” BCSC said in a statement.
As detailed in Addy’s blog post, the startup initially facilitated real estate investments through a special purpose vehicle, but by “property #27” the BCSC informed the company it would have to register as an EMD to continue operating.
Instead, Addy said it pivoted to partnering with third-party EMDs to facilitate investments but, in April 2024 the BCSC told the company that “wasn’t enough.” Addy then applied to become an EMD in August 2024. Jagger said that Addy will now primarily operate through its own dealer, Addy Dealer Corp, but may continue to work with other EMDs where it makes sense.
“Having our own EMD means we’re no longer dependent on external dealers—but we’re building an ecosystem, not a walled garden,” Jagger said.
Feature image courtesy Tierra Mallorca via Unsplash.