Media Mentions

Securities regulator publishes guidance on cryptocurrency offerings – The Globe and Mail

Jun 15, 2018 2 MIN READ

In a recent staff notice, the Canadian Securities Administrators offered some direction on the factors to take into account when determining whether a cryptocurrency token offering breaches securities laws. Alexandra Posadzki, a journalist with The Globe and Mail, reviews the content of the notice as well as the potential implications for the emerging cryptocurrency industry. Some of the factors listed in the notice include whether there is a finite number of coins, whether their value is fixed and how the tokens are promoted – all of which should be considered when determining whether a new digital token or coin is a security or not, particularly if it is the subject of an initial coin offering or ICO. Osler partner and cryptocurrency expert, Blair Wiley, explains in the article that regulators are adopting a broad approach by looking at the purpose behind the ICO.

“[The CSA] is focusing on the economic realities of the offering and not trivial factors designed to dress up what is effectively a capital-raising activity,” Blair says, adding that businesses that were seeking clarity from the CSA will be frustrated by the “considerable latitude” that regulators have given themselves when determining if securities laws should apply to specific offerings.

“Some in the business community may have hoped for more definitive goalposts around what’s permitted or not,” he continues. “I can appreciate that desire, but I can also appreciate the perspective of the regulators that they need to remain nimble and flexible and not draw a line in the sand.”

If you subscribe to The Globe and Mail, you can learn more about the direction provided by the CSA by reading Alexandra Posadzki’s full article “Securities regulator publishes guidance on cryptocurrency offerings” published June 11, 2018.