Bitcoin Forum

There is another big step towards market regulation. Canada following US and Singapore claims that any coin during ICO/ITO to be security. Staff Notice 46-307 issued by Canadian Securities Administrators  reveals that many of the digital tokens investigated by regulators in Canada fall under the definition of a security, thereby triggering a range of legal requirements.

This means that Canada closed their boarders to almost all ICO campaigns. Will it affect behavior of Canadian cryptoenthusiasts? (Opinion of Canadian and US residents are highly appreciated).

What country is next to regulate ICO?

It's common to post a link when you start a thread:

https://www.google.ca/search?q=Staff+Notice+46-307&oq=Staff+Notice+46-307&aqs=chrome..69i57&sourceid=chrome&ie=UTF-8

Just a statement that ICOs may fall under current regulations.

I don't think it will affect cryptoenthusiasts too much, it will set things back a bit, but Im sure it will be re-evaluated overtime.  

China is next. I'm curious about the outcome, because China's market of ICOs is very big and promising.

I think the European Union will soon regulate ICOs. There is so much over the top regulation of the securities market in the EU that I'm surprised the EU hasn't issued a directive already.

Canada's regulatory regime is a bit unique in that broad scope is given to the individual provinces' securities regulators. this means you may have varying approaches to the problem. On the plus side, Canadian regulators at least in Ontario and BC have been very knowledgeable, receptive, and eager to engage with the industry. On the negative side, it's uncommon for any province to go far outside the norm as set by the SEC.

Canada's version of the Howey Test is set by the Pacific Coin Exchange case:
* https://scc-csc.lexum.com/scc-csc/scc-csc/en/item/4380/index.do

For any Canadian "cryptoenthusiast" this announcement shouldn't have come as a surprise as it's largely the stance that the BC and ON province regulators have taken thus far.

   This is step forward, when governments starts to regulate ICO`s they are here to stay. I saw this links you shared, but they are
very long and with many not important informations for most of us here, can someone share some shorter version?
   Who is next is just guessing game, Canada is big country and US will follow, then China, Japan, Australia, EU.. couple more countries
and that is whole world. I wonder will Canada make some list of good and bad alt-coins, like they will favor some alt-coins, but some
will be forbidden. This list can make some coins to increase in price a lot.

Regulation will give people confidence about the legitimacy of an ico and the team behind it. However, if they adopt similar rules that are for other types of securities now, like the prospectus and requirement to sell only through a dealer, that would make it very expensive to have an ico and more expensive for us as someone has to pay the middle man. I think that would stifle innovation in the ico space (along with stifling scams)

I dont mind ICO regulation as long as I dont need no brokers and middlemans etc...

The whole notice seems to be positive as the regulatores are aware of changes and try to seek the way out of current situation. It is up for canadian cryptoenthusiasts whether to start collaborating or not. It seems to me that this way is rather difficult and will lead to ICO cost increase and would be rather time consuming. More obvious is to seek for offshore jurisdiction and conduct ICO there.


It won't take you much time to read 8 pages, but I think they are rather useful. I agree that there are not so many countries left for regulation. The questions is what to expect for ICO performers -Canada nad other countries contributors to coin legislation will not make the list of good and bad altcoins. But they can create list of legal and not legal coins. In this case many altcoins can face a lot of suits against them, so the price will go down.

Today I heard that Russia is going to regulate cryptocurrency market - no unqualifed individuals allowed to buy/sell cryptocurrencies. Only through brokers on Moscow exchange. The last hope is Crimea which could be a hub for crypto enthusiasts. The Quesition is if enthusiasts are eager to move to breakeaway region?!

I prefer expert opinion on this or opinions of those passionate about Cryptocurrency  NOT opinions of those who joined for the financial gains. People still don't understand the purpose of Cryptocurrency.  Bitcoin has never been regulated yet its doing just fine. Smh

ICO regulation is a good thing, we have too much scam coins or tokens recently.

Canada is going to regulate, not prevent you from investing per say. With Russia they make it sound like they want to prevent regular people from participating in ICOs much like the United States. ICO's will then have to abide by the regulations set by the governing body in Canada presumably.

Australia regulate ICO bcs idk if not i think their is next, but not Russia lol they people don't care about shit like that ALSO they people do ICO in other countries

Canada is more free than Russia. So this is normal for Canada to allow people conduct ICO. Russia is more rigid and they don't welcome ICO things warmly. Australia can be the next one instead of Russia.

 Russias crypto regulations are related to its plan to implement its own cryptocurrency called, BitRuble.

https://cointelegraph.com/news/we-cant-keep-crypto-under-lock-and-key-anymore-says-senior-russian-politician

New Rules and protocols for Institutional investors playing with peoples pension funds, Hardly Doom and Gloom. Canada about too have a Japan Moment  ;D

It's all about the humongous  money involved in every ICO's. If it wasn't for millions of dollars being collected by those get rich quick devs, maybe there will be no ICO regulation coming.

That's exactly the same position as the SEC. Think about it. Both the SEC and CSA said that these ICOs may fall under the definition of a security triggering massive legal requirements for those running ICOs. That means that, until further notice, they are fully subject to the same restrictions as other stocks (which no ICOs are complying with at all).

I really hope that by the time governments start to go after centralized exchanges with no KYC/AML requirements, decentralized exchanges will up an running.

Also, this is not only about institutional investors. If I understand the staff notice correctly, companies doing ICOs are required to collect huge amount of personal information about individual investors as well.


One note for all the people who are willing to trade anonymity for a little bit of security (i.e. "regulation is good as it weeds out scammers" guys): are you really willing to provide your real personal information to random startups on internet with no track record whatsoever?

This is also interesting part

Yes, China's market is huge! I can't wait when the Chinese starting to use crypto as way of creating the ICOs is the norm. Then I would see the Chinese government would step in.

I think, EU will be faster in accepting cryptocurrencies regulations than China.

Quick question for everyone. I'm not an accredited investor and I'm a US citizen, is it illegal for me to invest in ICOS? And if it is, is it illegal for me to buy coins that are still in the ICO phase on an exchange--for example, EOS--instead of from the dev team?

How about India? There is growing interest in that country and a new exchange that recently opened up - Bitbay. Perhaps they will regulate ICOs as well when things start moving over there.

If a person in United states or Canada, Invest in an ICO, then what will happen? How governments can prosecute those who have invested in ICOs?

I think regulation is right around the corner for most countrys to be honest. I don't think regulation will effect anything very much. There has been numerous talks in Denmark to regulate Bitcoin - but for now there isn't any, and in fact it is totally tax free to payout bitcoin.

ICOs as such should be regulated.
ICO is not a decentralised currency.
They are issued by a real physical company/institution and should comply to the law of nation it belongs to.

Soon many countries will follow the suit as there is no investor protection in ICO and there are many scams going. :(

So what does that mean for Canadian/Americans holding crypto on centralized exchanges?  Does that mean the government will come in and shut them down, in turn people would lose their coinage??  I thought the point of crypto currency is to get away from the centralization of banks/governments!! 

While here at the government level want to mine BITCOIN and make a farm. Here, the government still found a way out of the crisis.. The whole country will be mine to do ICO...

If so, don`t you think we get the same limitations as with IPO? ICO doesn`t have borders, therefore for ICO should be a consensus among many countries in order to keep the progress and protect unqualified investors.

it would probably get regulated about anywhere sooner or later.

which has disadvantages, but also advantages. like it might become harder for scamcoins.

 ::) how to control ICO. people can say it's premine and want sell token

If regulation of ICOS, means more consumer protection against scams, then I am all for it. I wouldn't like a blanket ban on all ICOS because many are innovative and ground breaking technological projects. To stifle innovation would be a terrible idea, especially with science and technology need a nice cash injection and are publicly mostly underfunded.

First of all I wouldn't go near any ICO if they require my documents, people come to crypto for the decentralization nature of it, now if they see not even here they are free of governments I wonder what happens to decentralized system? if any ICO asked for documents then they are lying about being decentralized and should be avoided if they are claiming to be free of regulations which is what crypto is promising people to be.

wait till they pull the "accredited investor" bullshit so that only the wealthy can participate and the poor stay poor. 

Ten tips about Canadian regulation of ICOs, CSA Staff Notice 46-307.

1. Regulators will treat each token using a case-by-case approach
2. Substance will trump form when it comes to ICOs
3. The CSA thinks many ICOs are securities offerings aimed at retail investors
4. The existing legal framework for securities will be applied: Pacific Coin
5. The Regulated System (or why white papers aren’t sufficient disclosure under Canadian securities law)
6. There are, can be civil as well as regulatory consequences for non-compliance
7. Cryptocurrency investment funds ought to follow the rules for funds too
8. Some token sales are securities offerings, and some token-securities are also derivatives
9. Resale restrictions need to be considered for tokens that are securities
10. The regulatory focus has shifted from crypto investment risks to tokens as securities

https://bitcoinmagazine.com/articles/op-ed-planning-ico-canada-here-are-10-regulatory-points-ponder/

As a canadian, I don't personally feel threatened by this. Governments will always try and stick their noses into things they do not or cannot fully understand. I think it would be quite hard for our government to enforce any type of regulation imposed onto ICO's. I think the big thing that would be affected by it if it does ever pass into law, would be the exchanges that host the ICO/IPO's. Look at New York and how the laws passed by them on cryptocurrency (Bitlicense I believe it's called) have affected the exchanges and the users within New york. Some have gone as far as IP blocking NYC citizens from using their exchanges, or a warning page agreeing that you are not living in the state.

Naturally this doesn't really affect them too much, VPN's and other loopholes/means to access and use the platforms exist, but I think the point is that world governments are starting to notice us, and if they are starting to place regulations around buying and selling, ICO's/IPO's, etc., then imagine another 5 years down the road. I think for now, there is not much to worry about, but in time we could face real problems. Governments everywhere have a tendency to get their greasy fingers into stuff they shouldn't...

Mistercoin--

This is only the beginning of large-scale regulation blockchain in the world as we would like - but sooner or later it was bound to happen.

I agree with you. My bigger fear is if also markets will be regulated, as if you cannot buy or sell if are not an accredited investor. I'd like to hear community's opinion about this. Are we going in that direction?

Canada can't allow low and middle class to get rich off crypto. Any kind of regulation will include accredited investor status. Only the wealthy will be allowed to participate.

What really matters is that most recent situations (US, Singapore, Canada, etc) are not regulation because no new rules are created. Rather, they all apply old rules to new situations. This is worse than new rules - new rules only work forward in time, while old rules can be applied to past. A government can claim that they looked at what was done before and the whole thing was not legal in first place. So far, in most cases it only means that ICO issuers should not sell in certain countries or to residents od certain countries. However if a person lies about its origin while the issuer did all he had to do under law to verify, then at worst the issuer has to cancel the deal.  

They are just trying to get money out of people, if you participate in an ico you need to pay your taxes, they are now realizing that there is another way to get additional money and they are trying to tap the market with their existing regulations that is all.

I like to see them try, first of all if all the ICOs were operating within the laws of regulations we wouldn't have so many scam ICOs here, point of them being so easy to scam is because of them accepting cryptocurrencies from investors anonymously, I don't know of any ICO asking people for their identification, and if they do then where is the decentralization here? because when you are offering coins in exchange for money it means there is no mining for that coin and if they are regulated then they have no place in crypto, they should go and offer to traditional markets controlled by governments.
Anyways I would like to offer my identity for any Canadian or Americans wishing to participate in any ICO :D now regulate that bi*ches :D

REAL ICO does this right now, for example.

Regulation is actually a good thing. It means people are starting to take crypto seriously

I've never understood how by regulating ICOs authorities can then check if people buy the tokens at ICO or not...

One of the laws used by US government to crack down online gambling is called Wire Act. It is piece of legislation written in 1961, which intended purpose was to make illegal to transmit horse race information via telegraph! for betting purposes. If someone can claim that telegraph = internet, he can also claim that ICO = share.

The thing is that the same process can be packaged differently and handled slightly different and stay under the radar for a long period of time. What really needs to happen is that within our own Community we need to regulate how these are handled. You have a company , individual, or a group of people that makes a certain number of promises to each of its vested members , and at this time because of the regulations we have absolutely no way to hold them accountable for those promises.

Regulation of the ICO market can have both polokhitelnye and negative sides. On the one hand, the ICO will not, perhaps, allow unqualified persons who would create coins for personal gain. However, excessive regulation of the crypto currency will be harmful and will call for such a market from the territory of this country to flow into other countries with more suitable conditions. Canada as a whole is characterized by loyal legislation, therefore, let's hope that there will be no excessive regulation and politicization in matters of organization and conduct of the ICO.

Formally this is not that bad - law of the land applies to such situations nevertheless. However, every norm requires enforcement and authority. As long as everything in the community is karma-based, the worst punishment for an offender is karma loss. However, if a person raises 2000BTC, cashes its out to fiat and runs away there is hardly anything that can or should be done except an old fashioned police report and criminal case for fraud.

Good example indeed! This is called 'legal reasoning by analogy'. In Roman law, there is a well known commentary that grapewines must be called in court only trees since the law treats them as such (even though they are more like shrub or hard grass) and whoever calls a grapewine 'grapewine' loses the case instantly. Ditto, tokens that confer a right to a fixed part of profits are shares in disguise for almost any court or legal authority. If it walks like a duck and quacks like a duck, it's a duck. 

Whatever anyone may say, Rusia is not the next here.. In 2018, we have presidential elections and at such a moment they will not regulate anything to the detriment of the majority that is not interested in any regulations.

Actually I see a big problem with all the regulatory stuff going on. As if you want to start a new ICO nowadays if the coin is going to give at least something back like "a precentage of win from x" you have to invest! before even starting the ICO at least 100 000$ for a good lawyer.
I mean wtf they aren't accepting Crypto as a currency but if you make some suprisingly they do...

The G20 has started to coordinate and harmonize their financial regulation and enforcement as originally announced would begin January 1. 2017.
The details are in the blog linked below…

I'm divesting (selling) all ICOs and never investing nor buying an "ICO-issued" token, because
I don't want to go to jail or suffer massive fines and watch my investment collapse in the future:

Are Most Cryptocurrencies Doomed to Collapse — because they’re “ICO-issued”? (https://bitcointalk.org/index.php?topic=2145300)

A buyer in regulated countries has no reason to be concerned but an issuer - yes.

https://news.bitcoin.com/a-phone-call-from-sec-pressures-ico-startup-to-close-operations/

CHINA news: Bitcoin is still legal in China. But ICO is illegal now!

By the way, we hear many talkings about "bitcoin" in official Russian massmedia, but nobody talks about "cryptocurrency", and I believe we will not hear about "ICO" from our officials in the next observable future..
So far they are planning to mine bitcoin themselves. And maybe they already do it "under table"

Well, this is a logical act, because too many fraudsters have come to this market, which do not understand anything at all and collect money for themselves without a rich life.

In the long run, it is better that crypto is being regulated. It's something that will happen for sure, the only question is when.

Are there any precedents of punishment in Canada for breaking laws on crypto market?

Russia is the likely option, but actually, next could also be India, as it has already been in the news that its central bank is looking into ICOs. After China, India is the biggest country population wise. In terms of global population, China and India already equal about one-third of the planet's people. Remember, this is not about regulating cryptos but ICOs, which will be a good thing for everyone in crypto. Once it is no longer seen as a threat, people will recognise the difference between crypto as a tech and ICO as one of many funding vehicles.

each country has different reactions to ICO. The regulation provides an illustration that ICO or Token in ICO is something that is considered to have an opportunity seen in terms of a negative perspective. :)

Nothing is confirmed how come everyone is talking like it's a done deal? If regulations do come in they will provide the crypto market with some much needed legitimacy.

To be honest recently, ICO market has changed many much and it does not keep nature of a type investment for long term or future.
It look like as speculative, even a huge speculative place for speculators spend their money to invest into them.

I have to agree with you. For 5 years, I have argued with the users here in favor of government regulation of the crypto-currency. Some say that it will negatively impact the anonymity. But I tend to disagree. Anonymity can't be breached unless you convert your coins to fiat cash. Even if you want to convert your coins to fiat cash, there are a lot of anonymous options, such as pre-paid debit cards (Bitplastic is an example). The advantage with government regulation is that it will make easier for the institutional investors to purchase Bitcoins. Anyway, for those who love anonymity, there are plenty of other options out there, such as Blackbytes, DeepOnion and Monero.

Fully agree with you that anonymity could be preserved using just crypto except of exchange it to fiat. It makes sense to use BTC or ERC20 tokens pre-paid cards and gives an opportunity to such a projects as TokenCard, Monaco etc. to expand their business. If you are very scared of volatility and it is the only reason to exchange your coins or tokens, Bancor is in assistance here.

Government regulation of crypto and ICO isn't bad. If world changes, if world's government regulation will become true the world coin cap will grow immideately because big money will come to this industry. I think forecasts about $2kB market capitalization in 1-5 years isn't dream! It's fact.

They can't ban so they try to regulate. That's not a problem. I hope we can get rid of these scam ICO's and only genuine ones left. There are too many scam ICO's popping out every day. They are heaven for money laundry purposes. It's not surprising governments want to clean up this dirty system.

Market cap of $2 trillion is theoretically possible. If you look at the market capitalization of various NASDAQ stocks in 2000 (during the dot com boom) you can see that many of them had appreciated by as much as 1,000 times. The total market capitalization of NASDAQ in 1999 was somewhere around $5.2 trillion. If that can happen almost two decades back, then what prevents Bitcoin from attaining just one-fifth or two-fifth of that market cap in the next 5 years?

Actually did you guys mention that most lets say around 70-80% of all coin projects are actually from Russia or at least Russians?
I mean look at Ethereum or Waves and the dozens ICOs running on them.
Any Idea why it is like that?

As I saw in the past lots of scam came and still come also from Russia.
It let me become very cautious when too many Russian names are in an ICO team.
I guess furthermore that they consider it as an easy way for money laundering as
was mentioned before.
Thanks to heaven, Europe is very slowly in regulating "Internet things", but it is of course
no easy task. I bet everyone, except the scammers, would wish to see just honest ICOs
but take a look at the stock exchanges. Even there's today lots of frauds that just taking
investors money. Where money is, fraud would never be far.

there should be some regulations about icos worldwide

Waves is a derivative of a single enterprising NYC venture fund and is so far used by its portfolio companies only.

THAT 's better because we can invest in legit and trusted ICO. There will minimize scam ICos that take away our cash. Scam ICOs make CHina and other countries Ban ICOs at all. That the worst thing in ICO of  the year ever in 2017. I hope in 2018  there will be trusted developers, real projects, and better coins.

The question is how would governments enforce such regulations. I can imagine that Bitcoin breaks several laws in several legal jurisdictions, but governments can't do much about it because due to its decentralized nature, there's no some specific target (person or legal entity) government can go after. You see governments targeting crypto to fiat exchanges, precisely because exchanges are legal entities registered in some jurisdiction. But in the end, this won't stop Bitcoin. It certainly affects its price, but it won't stop it.

Back to ICOs. If I were to anonymously create a new ERC-20 token through a smart contract, promote it over at 4chan and sell it off in ICO style, who's gonna stop me? Who's gonna bring a legal action against me? If some government declares my token illegal and ban its trading, how are they going to enforce that? Ban 0x protocol? Good luck with that.


Exactly. Do you own homework. Don't rely on your government to protect you from strange danger on internet. It seems to me that everyone here wants 1000x profits without any associated risks and that's not how the world works.

Moreover, as a investor I really don't give a sh.t if my investment fails due to team's inability to deliver promised product or if I lose my money due to ICO being the scam. That fact that I might be scammed just makes me more selective that's all.

I fully agree with your arguments, that one must do his own research on the one hand.
There won't ever be a 100% safety for investors.
At the stock exchanges, there is, despite high regulatory, much fraudulent behavior.

Currently, we can spot the development in the ICO sector, which lets me hope we are
on the right path.

In former times, just a page with nice numbers and partly idiotic concepts was enough to
collect money (best example UET).
But projects must present more and more reliable concepts, whitepaper and team members
to get investors trust. The stupid greed of some investors might be enough fed someday,
that even these ones start thinking before investing.

I just hope that good and trustworthy projects won't suffer under this dev.

All these ICO regulations will only do one thing for all the existing coins, make them sky rocket.

My country should ban them.. not regulate them.

ICO = SCAM.

They are hollow pointless bullshit for Bitcoin (FIAT) profits.
..not crypto-currencies (like Bitcoin)

And yeah every time there is bad news all of you here line up to twist it into good news.  ::)
I know i have posted a lot of it here over the years LOL

if there is another country that wants to close ico will add to the big problem later on because there are many people who become victims.hopefully the news circulating is just a nonsense.

A lot of countries will regulate them but I don't think they will be very successful enforcing the law.

If we say that All ICO's are scam thats same think to say all DAX and Nasdaq is scam too.
Its very similar to get listed in Nasdaq and getting listed on crypto exchanges. Both way you risk and get reward of risking money.

"many of the digital tokens investigated by regulators in Canada fall under the definition of a security"

many, not all.

what will be regulated and what won't?

We hear no any sound about ICO`s from our officials here in Russia.. They tensionly discuss the cryptocurrencies, but not ICO`s, and they yet do not really understand what is bitcoin.

 It will take quite enough time until our institutions will deal with ICO`s. It`s not a big problem for them right now

Yeah exactly. You lose once you learn we are not fck school children. Have been scammed once and I learned my lesson no need for the fck government to educate us!