Canadian securities regulators have released a wide-ranging statement on initial coin offerings (ICOs).
The statement from the Canada Securities Administrators (CSA) is focused on “Cryptocurrency Offerings” and provides the clearest indication yet as to how regulatory bodies plan to oversee the emerging funding model.
The notice outlines the requirements for companies involved in the launch and management of ICOs, as well as the exchanges that plan to list those assets for trading. Perhaps most notably, it 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.
The notice states:
“We have received numerous inquiries from fintech businesses and their legal counsel relating to ICOs/ITOs. With the offerings that we have reviewed to date, we have in many instances found that the coins/tokens in question constitute securities for the purposes of securities laws, including because they are investment contracts. In arriving at this conclusion, we have considered the relevant case law, which requires an assessment of the economic realities of a transaction and a purposive interpretation with the objective of investor protection in mind.”
The sentiment that such tokens are more likely to fall under the definition of a security is echoed elsewhere in the notice, where staffers point out that some ICO promoters have “[taken] the position that the coins/tokens are not subject to securities laws.”
“However, in many cases, when the totality of the offering or arrangement is considered, the coins/tokens should properly be considered securities,” the CSA wrote. “In assessing whether or not securities laws apply, we will consider substance over form.”
The notice also includes guidance for firms looking to create cryptocurrency investment funds in Canada. It invites firms that are interested in launching an ICO to consider signing up for a so-called regulatory sandbox, through which new financial products can be tested in a limited setting.
“In order to avoid costly regulatory surprises, we encourage businesses with proposed cryptocurrency offerings to contact their local securities regulatory authority to discuss possible approaches to complying with securities laws,” the notice states.
The release comes after regulators in Ontario published an advisory on ICOs in March, and just under a month after the US Securities and Exchange Commission stated that its rules may apply to some token sales.
Did you know that you can buy and sell Bitcoin with SolidTrust Pay? Simply create an account and follow these instructions! You can either buy Bitcoin from your account or convert it to USD and make a withdrawal using the method of your choice. We use a service that tracks the value of Bitcoin and exchanges it at whatever the current rate is.
In addition to Bitcoin, there are several other cryptocurrencies that are gaining recognition and popularity, including Litecoin, Ether and Dogecoin. With SolidTrust Pay, you can turn these “altcoins” into cash by depositing them into your SolidTrust Pay wallet and having them instantly converted to USD.
Navigate to your Deposit Money Area by clicking My Money -> Deposit Funds within your account and choose the “Bitcoin/Altcoins” option.
Enter the amount of money in USD you wish to withdraw from your altcoin wallet, check the Bitcoin Deposit option, enter your secondary password and click Deposit Funds.
Carefully read the details of your transaction, including the fees and total amount you will receive, then press the CONFIRM Transaction button.
Choose the coin you wish to use for your deposit from the dropdown menu (in the examples below, we chose Ether).
Enter your altcoin address, click Pay with Ether and press Continue!
Please note: Paying with altcoins takes a little longer than paying with bitcoins.
Expect a delay of 30-90 seconds before we register your payment.
The following is an up-to-date list of cryptocurrencies that you can use with SolidTrust Pay: