ICOs May Be Subject to Securities Laws in CanadaThe Canadian Securities Administrators (CSA) has issued a statement outlining regulatory concerns regarding Initial Coin Offerings (ICOs) that may fall under securities laws. The CSA, an umbrella organization comprised of Canada’s thirteen key provincial financial regulators, has expressed its belief that many tokens distributed via ICOs fall under the legal classification of securities.
The Canadian Financial Regulator Believes Many ICOs Should Be Subject to Securities Laws
The Canadian Securities Administrators has issued a statement outlining the regulator’s belief that many ICO token sales may fall under the legal classification of securities. As such, certain ICOs will be required to adhere to Canadian securities laws, depending upon the specificities of the token sale.
The CSA states that “cryptocurrency offerings can provide new opportunities for businesses to raise capital and for investors to access a broader range of investments. However, they can also raise investor protection concerns, due to issues around volatility, transparency, valuation, custody and liquidity, as well as the use of unregulated cryptocurrency exchanges.” The CSA is particularly concerned that “investors may be harmed by unethical practices or illegal schemes, and may not understand the properties of the investment products that they are purchasing.”
The CSA states that “many of these cryptocurrency offerings involve sales of securities”, and that “securities laws in Canada will apply if the person or company selling the securities is conducting business from within Canada or if there are Canadian investors.” The CSA also notes that ICOs “may also be derivatives and subject to the derivatives laws adopted by the Canadian securities regulatory authorities, including trade reporting rules.”
https://news.bitcoin.com/icos-may-be-subject-to-securities-laws-in-canada/
