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...tical, effective, responsive and accessible. Canada’s regime is well positioned to handle the inevitable insolvencies in traditional industries as well as in emerging industries and technologies such as cannabis, blockchain , cryptocurrency and artificial intelligence. It is an exciting time in Canadian restructuring law as new decisions and advancements are occurring daily. The Bankruptcy and Insolvency Act (BIA) and the Companies’...

...tical, effective, responsive and accessible. Canada’s regime is well positioned to handle the inevitable insolvencies in traditional industries as well as in emerging industries and technologies such as cannabis, blockchain , cryptocurrency and artificial intelligence. It is an exciting time in Canadian restructuring law as new decisions and advancements are occurring daily. The Bankruptcy and Insolvency Act (BIA) and the Companies’...

...Elliot A. Greenstone Partner 514.841.6581 Email Email egreenstone@dwpv.com Brian Kujavsky Partner 514.841.6401 Email Email bkujavsky@dwpv.com Expertise Capital Markets & Securities Technology blockchain Venture Capital and Growth Companies Share Download Print Related Pulling Out All the Swaps: Alberta Securities Commission Finds Total Return Swaps Abusive July 20, 2021 - The Alberta Securities...

...extent to which such transfers involved physical cash, transactions with foreign accounts and accounts owned by the same taxpayer. The Green Book also notes that similar reporting requirements would be imposed upon cryptocurrency asset exchanges and cryptocurrency custodians. These proposals would be effective for taxable years beginning after December 31, 2022. Although these reports would not directly notify the IRS of gross income in the same way a 1099 doe...

...Elliot A. Greenstone Partner 514.841.6581 Email Email egreenstone@dwpv.com Brian Kujavsky Partner 514.841.6401 Email Email bkujavsky@dwpv.com Expertise Capital Markets & Securities Technology blockchain Venture Capital and Growth Companies Share Download Print Related Pulling Out All the Swaps: Alberta Securities Commission Finds Total Return Swaps Abusive July 20, 2021 - The Alberta Securities...

...extent to which such transfers involved physical cash, transactions with foreign accounts and accounts owned by the same taxpayer. The Green Book also notes that similar reporting requirements would be imposed upon cryptocurrency asset exchanges and cryptocurrency custodians. These proposals would be effective for taxable years beginning after December 31, 2022. Although these reports would not directly notify the IRS of gross income in the same way a 1099 doe...

"New law practice: 100% focused on cryptocurrency and blockchain " by Addison Cameron-HuffADDISON CAMERON-HUFF, cryptocurrency LAWYER BLOG HOME CONTACT AUTHOR NEXT POST: BLOGGING: WHY THE GAP?” Thoughts and opinions of a Toronto-based blockchain lawyer. JANUARY 14TH, 2019 New law practice: 100% focused on cryptocurrency and blockchain I've started a new law practice that's 100% dedicated to serving the blockchain /crypto market. The launch was been covered on Friday by bitcoin Magazine: https:// bitcoin magazine.com/articles/canadas-first-all-crypto-legal-firm-opens-its-doors-to-global-clientele/. The firm was officially opened on the 10th anniversary of the bitcoin genesis block, January 3rd, 2019. I'm excited to be able to work full-time in this industry as cryptocurrency enters its second decade. From 2013-2017 I ran a technology law practice that slowly transformed into a cryptocurrency -focused law practice. The law practice was very successful, serving around 150 clients, primarily located in Ontario. But it was a bit too busy. In the fall of 2018 I was faced with the choice of either expanding my practice (i.e. hiring associates or adding partners), joining a larger firm, or doing something more radical. Around this time one of my key clients, ethereum co-founder Anthony Di Iorio, expressed an interest in having me change my role from outside counsel to inside counsel. In 2017 Anthony made me an offer to join Decentral Inc., his main corporation, a...

...s and it uses a fixed fee monthly model. My new practice aims to emulate the general counsel role for smaller private companies as well as providing specialty counsel for larger entreprise clients that are creating blockchain products. If you run a Canadian crypto company or have an international one with a complex legal strategy, please don't hesitate to get in touch. NEXT: BLOGGING: WHY THE GAP? ► BLOG HOME This blog is by Toronto cryptocurrency lawyer Addison Cameron-Huff. If you would like legal advice please contact reception@cameronhuff.com. The above content is legal information, not legal advice. You should hire a lawyer if you would ...

Addison Cameron-Huff's blockchain BlogADDISON CAMERON-HUFF, blockchain LAWYER Thoughts and opinions of a Toronto-based cryptocurrency lawyer who's worked in the industry since 2014. ADDISON CAMERON-HUFF JUNE 3RD, 2021 The Law of Speculation: Part 7 This is part 7 of a series of posts about the Law of Speculation (start at part 5 o...

...ncreasingly meeting with the opportunities & competition that manufacturers faced decades ago. Specifically, this post is in the context of moves to increase regulatory requirements for Canadian businesses in the cryptocurrency industry, but the issues aren't specific to cryptocurrency or blockchain technology. Centuries ago, the government promise of safety meant protection from invasion by neighbouring warlords. Today, it means protection from all manner of harms. In Canada, the public demand...

...o regularly call me to see if a lawyer has the answer to what the government and basic decency failed to prevent. The answer is usually no. READ THE REST OF THIS POST ► ADDISON CAMERON-HUFF MARCH 18TH, 2021 Canada's blockchain Industry is Hiring: Jobs Available This Week The blockchain space in Canada is booming and dynamic, being composed of many small to mid-sized players. This is great for competition but can make it difficult to find a position. Below are a few companies that a...

..., and according to a professional, free strategy by a famous advisor. READ THE REST OF THIS POST ► ADDISON CAMERON-HUFF JANUARY 7TH, 2021 The $500 Million Per Year Business Waiting To Happen for Global Banks bitcoin and Ether are notoriously difficult to store securely and approaching the value of the global gold market. This is a $500 million a year business waiting to happen for one of Canada's big banks. Banks have the reputation, technical staff, security, and insurability, to become major players in the future market of storing cryptocurrency . Cryptocurrencies liberate people from the need to use the financial system. There is no dependency on banks, except for exchanging to money, which largely relies on banks. But there's an opportunity for banks to go back to their roots as trusted places to store wealth. A Canadian bank could likely attract 5% of the world's cryptocurrency for storage if they could offer a secure, fast, insured service. It would immediately be used by institutional investors, high net worth individuals, and a significant portion of the individuals who hold smaller amounts of cryptocurrency . READ THE REST OF THIS POST ► ADDISON CAMERON-HUFF DECEMBER 8TH, 2020 Seven Trends In blockchain To Affect Canadian Regulation in 2021 Here are seven trends happening in the world of blockchain that may affect Canadian and American regulation in the coming years: on-chain insurance, prediction markets, decentralized exchanges, collectibles, digital dollars, securitization and leverage. REA...

...(link below). Quite informal. The first one will be next Wednesday, November 18th. READ THE REST OF THIS POST ► ADDISON CAMERON-HUFF NOVEMBER 8TH, 2020 Better Tracking of Toxic Waste Using Public Digital Records blockchain -based systems with public open data records are one of the best ways to create a permanent, publicly-verifiable record of data. I've previously written about learning from supply chain/luxury brand work in blockchain s, and how that could be applied in the context of tree planting and carbon trading. But these systems could also be used to better track pollution. Specifically, this approach could be used to upgrade the Canadian NPRI system. READ THE REST OF THIS POST ► ADDISON CAMERON-HUFF NOVEMBER 8TH, 2020 NBA Top Shot: NBA + blockchain via Dapper Labs The NBA has licensed their brand and content to Dapper Labs for a new type of collectible pack marketed as "Top Shot". Top Shot is like baseball cards, coming in digital foil packs, but with videos and a marketplace for trading. This is the evolution of a breakout hit CryptoKitties a couple years ago by the same developer. Now they've launched a produced in partnership with one of the biggest sports franchises. READ THE REST OF THIS POST ► ADDISON CAMERON-HUFF OCTOBER 30TH, 2020 Luxury Brands Have Embraced blockchain , Can It Be Done For The Environment? Luxury brands like Breitling and Louis Vuitton have embraced the use of blockchain technology for anti-counterfeiting purposes. These approaches are now mature enough that, in conjunction with IoT and stablecoins, they could provide significant benefits for environmental initiative...

...e transparent about who has gained and lost through its spending, and how. MONEY SUPPLY: 3X, BALANCE SHEET: 5X READ THE REST OF THIS POST ► ADDISON CAMERON-HUFF AUGUST 21ST, 2020 A Canadian Crypto SRO The Canadian cryptocurrency industry should be one of the strongest in the world, being the birthplace of ethereum , close to the US market, a good bridge from China/HK, generous tax credits for R&D work, and many other advantages. But the industry has been plagued by a poor understanding of regulatory issues, unu...

... POST ► ADDISON CAMERON-HUFF FEBRUARY 11TH, 2020 Canada Stablecorp Launches Canadian Dollar Stablecoin: QCAD Today was the launch of Canada Stablecorp's "QCAD" product, a Canadian Dollar stablecoin available on the ethereum network. The launch was covered by Coindesk and the press release is live here. There's also a short FAQ at stablecorp.ca/faqs. A few of the launch partners put out their own news/press releases, such as Bitvo and Netcoins. The news was also carried by Yahoo Finance and other outlets today. READ THE REST OF THIS POST ► ADDISON CAMERON-HUFF FEBRUARY 10TH, 2020 Key Laws for Canadian cryptocurrency Companies in 2020 I've been blogging about legal issues for Canada's cryptocurrency / blockchain industry since 2013. In that time, there's been a transition from a focus on payments/commercial issues to areas that are more commonly seen by large enterprises like securities law, sanctions, and Excise Tax Act issues. Below are a few sareas that most frequently come up today with crypto companies, along with the sorts of questions that people have about them. KEY AREAS OF CANADIAN LAW READ THE REST OF THIS POST ► ADDISON CAMERON-HUFF JANUARY 21ST, 2020 Have Canadian Securities Regulators Gone Too Far In Quest To Address cryptocurrency Exchange Risks? The Canadian Securities Administrators (the joint body of Canada's provincial securities regulators) issued guidance on January 16th, 2020 that explains their thinking: the way that nearly all cryptocurrency exchanges operate around the world is in contravention of Canadian securities laws. The interpretation necessary to get there is inconsistent with other jurisdictions and poses risks to the Canadian digital economy outside of the cryptocurrency sphere. This blog post explains what the latest guidance is, why industry players are concerned, and why it's problematic for the future. This is a very long blog post because of the complexity of this issue. Here's a brief table of contents: READ THE REST OF THIS POST ► ADDISON CAMERON-HUFF JANUARY 6TH, 2020 Could blockchain Be The Next Gambling For Canada's First Nations? In the late 1990s the Mohawaks of Kahnawake, near Montreal, opened Canada's first data centre located on First Nations territory and enacted their ow...

...at might be the next digital business opportunity for First Nations? LEARNING FROM THE ONLINE GAMBLING EXAMPLE READ THE REST OF THIS POST ► ADDISON CAMERON-HUFF NOVEMBER 12TH, 2019 Recent Developments in Canadian blockchain Law: November, 2019 This article is a round-up of recent developments in Canadian blockchain law: A novel bitcoin investment fund ("The bitcoin Fund") put forward by 3iQ Corp. was approved by the OSC Upcoming changes to the Excise Tax Act to clarify virtual currency sales tax treatment Changes to take effect next summer regarding virtual cur...

... investors may be able to recover their money through civil actions against the offerors, either in parallel or following up on, government efforts. This is a path to recovery that's received much less notice within cryptocurrency efforts than the high-profile cases brought by securities regulators, such as the ongoing Kin litigation (which involves a SAFT too). READ THE REST OF THIS POST ► ADDISON CAMERON-HUFF JUNE 1ST, 2019 Digital Law for a Digital World, Creating a Better Legal System in Canada We need a new system of law publishing in Canada: Digital Law. Digital Law is a change in the way laws are made available to the public, not a change in the structure of our legal system or the entities that create the law. READ THE REST OF THIS POST ► ADDISON CAMERON-HUFF MAY 13TH, 2019 Why Is Legal Advice So Expensive in Ontario? This article isn't about blockchain law (my day-to-day work and usual subject of this blog). It's about a much bigger issue. READ THE REST OF THIS POST ► ADDISON CAMERON-HUFF MAY 10TH, 2019 Large-Scale Money Laundering Is Old-Fashioned, Not Done Using cryptocurrency In BC, an expert panel commissioned by the provincial government has estimated that $5.3 billion/year is laundered through real estate transactions (pg. 54): https://news.gov.bc.ca/files/Combatting_Money_Laundering_Report.pdf. Even if every single cryptocurrency trade in Canada was done by criminals for the purpose of money laundering, it wouldn't come close to the scale of money laundering in BC, in one year, using real estate. For years now I've been on panels where people bring up money laundering using cryptocurrency (always without evidence). To the extent that anyone took this idea seriously, they've apparently been looking in the wrong place. I hope that this new research about money laundering helps refocus C...

... discussion, but I hope that this article about assumptions will help others who are responding to the CSA/IIROC before the May 15th deadline. READ THE REST OF THIS POST ► ADDISON CAMERON-HUFF APRIL 29TH, 2019 Toronto blockchain Week 2019: Synopsis Toronto blockchain Week was a huge success last week. We managed to rally our vibrant, diverse community of educators, businesspeople, developers, government, and the public, to attend 47 different events across Toronto. Thousands of people attended the week's events, and I was impressed by the calibre of the events I attended (unfortunately there were so many that I only attended about a third of them). Here are just a few of the organizations that ran/helped run events last week: READ THE REST OF THIS POST ► ADDISON CAMERON-HUFF MARCH 26TH, 2019 Creative Destruction Lab's blockchain Incubator: Starts July 22nd The Creative Destruction Lab, located at U of T's Rotman School of Management, has launched a blockchain -focused incubator program. The program offers mentorship and (up to) $100k USD of investment, in exchange for an equity stake. READ THE REST OF THIS POST ► ADDISON CAMERON-HUFF MARCH 17TH, 2019 3iQ bitcoin Fund Proposal Denied By OSC, Application Filed For Hearing The Ontario Securities Commission (OSC) released its decision to refuse to issue a receipt for a proposed NRIF (see below) investment product called "The bitcoin Fund" last month. The fund is being put forward by the tenacious team at 3iQ Corp., who on Friday filed an application requesting a hearing about the refusal. The application contains further details...

...t of thought into these issues, and they've included operational details in the application that are interesting notes about the state of the industry in Q1 2019. For example, paragraphs 38-49 discuss their proposed bitcoin valuation methodology and why, in their view, it conforms to NI 81-106. READ THE REST OF THIS POST ► ADDISON CAMERON-HUFF MARCH 11TH, 2019 Business Idea: A Locally-Encrypted Legal Platform Like Clio...

...tion? The rest of this blog post talks about one possible way of addressing confidentiality in the era of cloud software tools for lawyers. READ THE REST OF THIS POST ► ADDISON CAMERON-HUFF MARCH 10TH, 2019 Toronto blockchain Week: April 22nd to 28th Toronto will be celebrating Toronto blockchain Week (TBW) from April 22nd till 28th. The website for TBW is https://www.toronto blockchain week.io and the reaction to its launch last week has been very positive. Toronto has a lot to effort to the nascent blockchain industry. READ THE REST OF THIS POST ► ADDISON CAMERON-HUFF MARCH 6TH, 2019 The Role of Stolen Payment Credentials in Crypto Banking Problems The most common question I've heard from clients over the last five years of working with the crypto industry in Canada is: “How does my company get a bank account?” One of the reasons why it's so hard to get a bank account for a cryptocurrency -related company is the prevalence in Canada of stolen payment credentials (debit/credit card information). Most people who I ask about this crime says it's happened to them. In a study by Canada's Chartered Professional Accountants, approximately 1/3 of Canadians said they'd been a victim of this crime. The rest of this blog post will explain how this commonplace crime is connected to the difficulties that companies have had in opening business bank accounts in the virtual currency ( cryptocurrency ) space. READ THE REST OF THIS POST ► ADDISON CAMERON-HUFF FEBRUARY 6TH, 2019 blockchain Governance and the Public Interest Standard Many concepts sound great in theory but become thorny in practice. One of those concepts is the idea of the "public interest". The term has existed as a principle for good government, in various forms, for thousands of years and it's widely used in law. In a recent blog post, a well-known ethereum developer implicitly put forward the idea that public blockchain s ought to be run in the "public interest". But what does the term mean and is that a standard that ought to be at the heart of ethereum , or any other public blockchain ? It's a concept that's widely used in law. Why not for ethereum ? The term "public interest" appears in ethical guides, statutes, and administrative law textbooks all over the world. But this simple term hides a complicated reality. Few people agree on what the "public interest" is, how to identfiy it, or how to know when something isn't in the public interest. This is a standard that opens the door to debate, rather than providing a standard in the sense of ethereum 's ERC-20, technical standards, or really anything that programmers would say is a "standard". What lawyers and regulators call a "standard" might surprise people who are not familiar with the thousands of pages of scholarship on various sorts of "standards" in law (e.g. Canadian administrative law). READ THE REST OF THIS POST ► ADDISON CAMERON-HUFF JANUARY 30TH, 2019 Toronto's blockchain Lawyers: A Growing List (January, 2019) Toronto has an impressive and growing group of legal professionals who work in the blockchain space. This blog post is an attempt to list the people and their areas of focus (see the end of the table for the inclusion criteria and disclaimers). Lawyer's Name % blockchain (Approximate) Brief Overview Of Their blockchain Work Aaron Grinhaus 10-20 Tax, securities and commercial law Addison Cameron-Huff 100 Legal executive for blockchain companies (commercial/corporate) Ana Badour 15 AML, payments law and financial services regulation Binh Vu More Than 10 Companies going public and corporate financing Chetan Phull 95 Regulations, cro...

...nture capital and securities compliance Geoff Rawle More Than 10 Cross-border STOs, trading platforms, and funds work Ian Palm 20 Capital raising, M&A and commercial advice James Longwell 10 Protecting and reviewing blockchain intellectual property Jason Saltzman More Than 10 Securities law and compliance matters Laura Gheorghiu 10 Tax advice for Canadian tech companies Lori Stein 13.5 Advises cryptoasset investment funds ...

... JANUARY 25TH, 2019 The Non-Fungible Token (NFT) License Agreement Canadian company Dapper Labs Inc. has a new license to share with the world: version 2 of the "NFT License". This license relates to a special kind of ethereum "token" pioneered by the company using their popular game/marketplace: CryptoKitties (further information here). READ THE REST OF THIS POST ► ADDISON CAMERON-HUFF JANUARY 23RD, 2019 Who Manages ethereum Mining? Are They A Good Target For Litigation Or Regulation? Who runs ethereum ? Who's accountable for what happens on the ethereum network? This is the first in a series of blog posts exploring this topic. READ THE REST OF THIS POST ► ADDISON CAMERON-HUFF JANUARY 23RD, 2019 The FCA (UK) Is Consulting on Cryptoassets The UK's financial industry regulatory body, the Financial Conduct Authority, is consulting on "cryptoasset" regulation until April. They've issued a document that contains their views on various aspects of the industry and how they might be regulated. READ THE REST OF THIS POST ► ADDISON CAMERON-HUFF JANUARY 14TH, 2019 New law practice: 100% focused on cryptocurrency and blockchain I've started a new law practice that's 100% dedicated to serving the blockchain /crypto market. The launch was been covered on Friday by bitcoin Magazine: https:// bitcoin magazine.com/articles/canadas-first-all-crypto-legal-firm-opens-its-doors-to-global-clientele/. The firm was officially opened on the 10th anniversary of the bitcoin genesis block, January 3rd, 2019. I'm excited to be able to work full-time in this industry as cryptocurrency enters its second decade. From 2013-2017 I ran a technology law practice that slowly transformed into a cryptocurrency -focused law practice. The law practice was very successful, serving around 150 clients, primarily located in Ontario. But it was a bit too busy. In the fall of 2018 I was faced with the choice of either expanding my practice (i.e. hiring associates or adding partners), joining a larger firm, or doing something more radical. Around this time one of my key clients, ethereum co-founder Anthony Di Iorio, expressed an interest in having me change my role from outside counsel to inside counsel. In 2017 Anthony made me an offer to join Decentral Inc., his main corporation, as its Chief Legal Officer. Within two months I was promoted to President and took on a general management role. READ THE REST OF THIS POST ► ADDISON CAMERON-HUFF DECEMBER 3RD, 2018 Blogging: Why the Gap? My last blog post was in August, 2017. The reason why there hasn't been other posts since then is that I became the President of Decentral Inc. At Decentral I led the development of a next generation cryptocurrency wallet (jaxx.io) and many other exciting projects. I built up the company to 35 employees, increased revenue by millions of dollars a year, released a major new platform, and helped nearly a million people around the world to interact with their cryptocurrency . I didn't have time for personal blogging. READ THE REST OF THIS POST ► ADDISON CAMERON-HUFF AUGUST 31ST, 2017 ICOs: Thoughts on CSA Staff Notice 46-307 Last week the CSA published a staff notice on ICOs (token crowd sales) and cryptocurrency funds. This week my thoughts on that staff notice were published in bitcoin Magazine: https:// bitcoin magazine.com/articles/op-ed-planning-ico-canada-here-are-10-regulatory-points-ponder/. The actual staff notice, titled “CSA Staff Notice 46-307 cryptocurrency Offerings” can be read here. READ THE REST OF THIS POST ► ADDISON CAMERON-HUFF AUGUST 14TH, 2017 VC vs. ICO In an hour I'll be speaking on a panel at the bitcoin & ethereum Summit. The topic for the panel is ICO vs. VC. As a prelude to the talk, here's a table that compares venture capital (VC) investment with initial token offerings (ITO)/initial coin offerings (ICO) s...

...SSES ACT”. I hope that this model law is not used as inspiration for regulatory efforts in Canada. This blog post explains why. READ THE REST OF THIS POST ► ADDISON CAMERON-HUFF JUNE 4TH, 2017 Toronto's Most Technical blockchain Law Event On March 20th Donald Johnston (Aird & Berlis) and I ran an event with OsgoodePD titled “Critical and Emerging Issues in blockchain Law”. This is my recap of what was covered. READ THE REST OF THIS POST ► ADDISON CAMERON-HUFF JUNE 3RD, 2017 FlatLaw.ca Traffic Statistics I created flatlaw.ca in 2013 shortly after starting up my ...

...out 125 people tune in and they've kindly permitted me to distribute the slides. A webcast will also be made available next week on their Vimeo page. READ THE REST OF THIS POST ► ADDISON CAMERON-HUFF APRIL 3RD, 2017 bitcoin Magazine Article on Tokenization of Real World Assets My article on “tokenization” of real world assets was published by bitcoin Magazine on Friday. From the introduction: “Tokenization is the process of converting rights to an asset into a digital token on a blockchain . There is great interest by financial intermediaries and technologists around the world in figuring out how to move real-world assets onto blockchain s to gain the advantages of bitcoin while keeping the characteristics of the asset.” READ THE REST OF THIS POST ► ADDISON CAMERON-HUFF MARCH 21ST, 2017 Key Canadian Laws for blockchain Companies Yesterday I spoke at the OsgoodePD mini-conference on “Critical and Emerging Issues in blockchain Law”. One of the items I covered was a brief highlight of laws that are often relevant to blockchain companies. Here are the statutes: 1. Federal anti-money laundering law: Proceeds of Crime (Money Laundering) and Terrorist Financing Act. Note that there's also a Quebec law that might be relevant. ...

...rencies today. Much of the paper consists of an excellent history of bank notes. But the paper also contains claims about digital currencies, specifically, private, non-Central Bank affiliated digital currencies like bitcoin . This blog post explains why the working paper's Lesson 1 claim about digital currency counterfeiting is not correct. The working paper states that bank notes have always been counterfeited. They then go on to explain several problems with digital currencies that have nothing to do with counterfeiting (such as "fraud" and "cyber attacks") and conclude with: READ THE REST OF THIS POST ► ADDISON CAMERON-HUFF FEBRUARY 27TH, 2017 What Can You Do With bitcoin ? Here's What I've Bought with bitcoin bitcoin hit new record highs recently ($1600 CAD), in part based on speculation about bitcoin ETFs. Although some people look at bitcoin as in investment, other people use it as a payment method. What sorts of things can you buy with bitcoin ? In recent months I've heard of people using bitcoin for: READ THE REST OF THIS POST ► ADDISON CAMERON-HUFF FEBRUARY 17TH, 2017 The Delaware Court of Chancery Also Likes blockchain The Delaware Court of Chancery (leading corporate law court in the US) ruled on Wednesday in a case that involved miscounting of shares as part of a buyout of Dole. In a footnote the court notes that blockchain technology would be a good solution to one of the key issues in the case: “[D]espite laudable and largely successful efforts by the incumbent intermediaries to keep the system working, the problems have grown. ... Distributed ledger technology offers a potential technological solution by maintaining multiple, current copies of a single and comprehensive stock ownership ledger.” - Footnote #1, pgs. 8-9 READ THE REST OF THIS POST ► ADDISON CAMERON-HUFF JANUARY 2ND, 2017 blockchain -Based Companies: How Rwanda Could Out-Compete Delaware Delaware is the corporate capital of the United States. It has more corporations than residents. Many jurisdictions would like to follow in Delaware's footsteps and become a hub for incorporations (one benefit: ongoing registration fees). And in 2017 there's an opportunity to use technology to leapfrog Delaware and create a global corporate hub. This blog post lays out how Rwanda could create a Delaware-beating infrastructure based on blockchain technology (also called "Distributed Ledger Technology"). Added bonus: Rwanda create a new class of online corporation with publicly traded securities. READ THE REST OF THIS POST ► ADDISON CAMERON-HUFF DECEMBER 15TH, 2016 Corporate Voting via blockchain - Major Corporate Investments and Looking Forward Last week I spoke about blockchain -based corporate voting (and other topics) at the “ blockchain Symposium” held by Gowlings WLG in Toronto. This blog post expands on that discussion and explains why I think corporate voting via blockchain will be reality within the next few years. Corporate voting is just one aspect of the large constellation of service companies that handles ownership, registration, transfer, settlement, clearing, and other functions of the public securities markets. What's going on in the world of securities management/investor communications? READ THE REST OF THIS POST ► ADDISON CAMERON-HUFF DECEMBER 13TH, 2016 Bay St. Banks Embrace blockchain : Job Ads TD is looking for a manager for their "Enterprise Shared Platform of blockchain Center of Excellence". The position "reports to the VP, blockchain CoE to support the business priorities of the blockchain CoE." The ad was posted a month ago: https://www.linkedin.com/jobs/view/236085965. READ THE REST OF THIS POST ► ADDISON CAMERON-HUFF DECEMBER 6TH, 2016 Federal Reserve Paper on blockchain Technology The US Federal Reserve published a paper this week on the application of blockchain technology to the payments, clearing and settlement sectors of the US financial system. The paper is an excellent overview of the current system and how blockchain might change things. Section 2.1 provides explanations of payment processing, securities post-trade processes and the roles of financial intermediaries. From the section on settlement: READ THE REST OF THIS POST ► ADDISON CAMERON-HUFF OCTOBER 15TH, 2016 Starting a blockchain Software Company: 65 Point Legal Checklist Starting a blockchain software business? Below is a checklist of some of the legal & business issues common to this emerging industry. 1. CODE    ☐ Build off an existing platform like ethereum or create a new blockchain platform?       ☐ Generally don't need permission to build but banks are keen on "permissioned" blockchain s and integration partners may require agreements    ☐ Open source or closed source? Generally " blockchain " = open source but there are other models (e.g. R3).       ☐ A combination of open source and closed source? Which parts?    ☐ How will the blockchain be used? How will the software be used? Which open source license is most appropriate?    ☐ Who will own contributions to the code? Will there be a "contributor license agreement"? Assignment?    ☐ W...

...e Ontario Highway Transport Board and poses seven questions. My answers are at the end of this blog post. READ THE REST OF THIS POST ► ADDISON CAMERON-HUFF JULY 8TH, 2016 McKinsey Report on Insurance Industry + blockchain McKinsey & Company (a prominent consulting firm) has released a report on the application of blockchain technology to the insurance industry. READ THE REST OF THIS POST ► ADDISON CAMERON-HUFF JULY 5TH, 2016 The DAO: Status Update "The DAO" was an attempt to create a virtual currency investment fund on the ethereum network. I wrote about it from a legal perspective back in May. In the month following my blog post, The DAO reached over $150 million USD in value and was then hacked. READ THE REST OF THIS POST ► ...

...e more interesting word pairs. READ THE REST OF THIS POST ► ADDISON CAMERON-HUFF MAY 9TH, 2016 Critique of Slock.it DAO Paper A "Decentralized autonomous organization ('DAO')" white paper has been published by German blockchain company Slock.it UG. This white paper is part of a larger conversation that's been going on for a few years in the bitcoin / blockchain world. The basic idea is to build a software program that runs like a company, but on a decentralized software platform (e.g. ethereum ). Slock.it's paper is one of the longer contributions to this effort (31 pages, including code examples). This blog post details a few thoughts on the Slock.it proposal, from a lawyer's point of vie...

...st private sector jobs for similar roles don't have posted salaries but appear to be about $30k/yr higher. READ THE REST OF THIS POST ► ADDISON CAMERON-HUFF MARCH 21ST, 2016 Food for Thought from CIGI Roundtable on blockchain Regulation Last week I attended a roundtable put on by CIGI in Toronto titled “Regulating blockchain & Distributed Ledger Technologies: Challenges and Opportunities for Canadian Innovation”. Speakers included key people from industry, government and academia. I've distilled my notes about speakers' thoughts and my own reflections into 18 questions. Please note that the roundtable was conducted under a rule of not crediting speakers - the thoughts below are mostly not my own. When we talk about regulation, what are we talking about? (Smart contracts, industry standards, technical standards, regulations, acts, common law, etc.?) What are the benefits of blockchain s right now? What will the future benefits be? What might the downsides be? Who should be trusted? Banks? bitcoin exchanges? Programmers? Do parties that require trust also require government-created rules? Will we still have banks in 30 years? What about other intermediaries? Who will take a cut of future blockchain transactions? Which intermediaries? Government authorities? Will government authorities take a cut of transactions directly? (i.e. X% of each transaction goes to the CRA) Governments have an impulse to regulate. Will new regulations mean giving up the benefits of blockchain or giving up Canada's place in the global market? What are the implications of "programmable trust"? Will we have a future where government functions are transferred to private interactions (i.e. smart contracts) administered through blockchain s? What role is there for the (Canadian) government to play as a partner rather than a regulator? Which activities should be governed by criminal law and which by a lighter touch (fines, AMPs, etc.)? Is a lack of a regulation in the blockchain space a "gap" in the law or an opportunity for entrepreneurs? Can regulatory "gaps" be filled with common law and economic behaviour rather than government-prescribed rules? Are there any gaps that cannot be filled by private actors or court-created law? Should blockchain developers be expected to assist government in their traditional roles of law enforcement and taxation? Are the differences between "public" and "private" blockchain s important to regulators? What are the jurisdictional challenges to a decentralized global economic system enabled by blockchain s? Is there a breaking point in which blockchain benefits (in the form of talented humans making these systems) migrate to less regulated countries? What can be done to ensure that "good" regulations are made by the federal and provincial governmen...

...million hectolitres of beer consumed in Ontario, grocery stores will be able to sell a maximum of 163,300 - around 2% of total beer sales. READ THE REST OF THIS POST ► ADDISON CAMERON-HUFF SEPTEMBER 17TH, 2015 blockchain Gambling One of the first applications of bitcoin was online gambling because gambling companies have a hard time with a) chargebacks; and, b) the legality of their services. The earlier pioneers in bitcoin gambling all suffered from a problem of centralization: there was always a single website that gamblers had to use and trust. Recent innovations like Augur and ethereum are changing the dynamic. A new service called Augur (built on top of ethereum ) has been getting a lot of media attention and apparently racing bookies are concerned: http://www.racingpost.com/news/horse-racing/tom-kerr-augur-could-become-racing-s-worst-nightmare/1953992. READ...

...ceived 80 visitors. Two years later, my blog receives around 1100 visitors a month. READ THE REST OF THIS POST ► ADDISON CAMERON-HUFF AUGUST 8TH, 2015 Bitfinex Abandoning New York State New York's heavy-handed bitcoin business regulation (the "BitLicense") has caused at least one player to abandon the New York market: https://www.bitfinex.com/pages/announcements/?id=51. Bitfinex's move comes following outcry when...

Addison Cameron-Huff's blockchain BlogADDISON CAMERON-HUFF, blockchain LAWYER Thoughts and opinions of a Toronto-based cryptocurrency lawyer who's worked in the industry since 2014. ADDISON CAMERON-HUFF SEPTEMBER 19TH, 2021 Drafting Contracts For cryptocurrency Clients I've been drafting contracts with a heavy focus on cryptocurrency since 2014. This blog post gives a few tips I've picked up over the years. TYPES OF CONTRACTS READ THE REST OF THIS POST ► ADDISON CAMERON-HUFF JUNE 3RD, 2021 The Law of Speculation: Part 7 This i...

...ncreasingly meeting with the opportunities & competition that manufacturers faced decades ago. Specifically, this post is in the context of moves to increase regulatory requirements for Canadian businesses in the cryptocurrency industry, but the issues aren't specific to cryptocurrency or blockchain technology. Centuries ago, the government promise of safety meant protection from invasion by neighbouring warlords. Today, it means protection from all manner of harms. In Canada, the public demand...

...o regularly call me to see if a lawyer has the answer to what the government and basic decency failed to prevent. The answer is usually no. READ THE REST OF THIS POST ► ADDISON CAMERON-HUFF MARCH 18TH, 2021 Canada's blockchain Industry is Hiring: Jobs Available This Week The blockchain space in Canada is booming and dynamic, being composed of many small to mid-sized players. This is great for competition but can make it difficult to find a position. Below are a few companies that a...

..., and according to a professional, free strategy by a famous advisor. READ THE REST OF THIS POST ► ADDISON CAMERON-HUFF JANUARY 7TH, 2021 The $500 Million Per Year Business Waiting To Happen for Global Banks bitcoin and Ether are notoriously difficult to store securely and approaching the value of the global gold market. This is a $500 million a year business waiting to happen for one of Canada's big banks. Banks have the reputation, technical staff, security, and insurability, to become major players in the future market of storing cryptocurrency . Cryptocurrencies liberate people from the need to use the financial system. There is no dependency on banks, except for exchanging to money, which largely relies on banks. But there's an opportunity for banks to go back to their roots as trusted places to store wealth. A Canadian bank could likely attract 5% of the world's cryptocurrency for storage if they could offer a secure, fast, insured service. It would immediately be used by institutional investors, high net worth individuals, and a significant portion of the individuals who hold smaller amounts of cryptocurrency . READ THE REST OF THIS POST ► ADDISON CAMERON-HUFF DECEMBER 8TH, 2020 Seven Trends In blockchain To Affect Canadian Regulation in 2021 Here are seven trends happening in the world of blockchain that may affect Canadian and American regulation in the coming years: on-chain insurance, prediction markets, decentralized exchanges, collectibles, digital dollars, securitization and leverage. REA...

...(link below). Quite informal. The first one will be next Wednesday, November 18th. READ THE REST OF THIS POST ► ADDISON CAMERON-HUFF NOVEMBER 8TH, 2020 Better Tracking of Toxic Waste Using Public Digital Records blockchain -based systems with public open data records are one of the best ways to create a permanent, publicly-verifiable record of data. I've previously written about learning from supply chain/luxury brand work in blockchain s, and how that could be applied in the context of tree planting and carbon trading. But these systems could also be used to better track pollution. Specifically, this approach could be used to upgrade the Canadian NPRI system. READ THE REST OF THIS POST ► ADDISON CAMERON-HUFF NOVEMBER 8TH, 2020 NBA Top Shot: NBA + blockchain via Dapper Labs The NBA has licensed their brand and content to Dapper Labs for a new type of collectible pack marketed as "Top Shot". Top Shot is like baseball cards, coming in digital foil packs, but with videos and a marketplace for trading. This is the evolution of a breakout hit CryptoKitties a couple years ago by the same developer. Now they've launched a produced in partnership with one of the biggest sports franchises. READ THE REST OF THIS POST ► ADDISON CAMERON-HUFF OCTOBER 30TH, 2020 Luxury Brands Have Embraced blockchain , Can It Be Done For The Environment? Luxury brands like Breitling and Louis Vuitton have embraced the use of blockchain technology for anti-counterfeiting purposes. These approaches are now mature enough that, in conjunction with IoT and stablecoins, they could provide significant benefits for environmental initiative...

...e transparent about who has gained and lost through its spending, and how. MONEY SUPPLY: 3X, BALANCE SHEET: 5X READ THE REST OF THIS POST ► ADDISON CAMERON-HUFF AUGUST 21ST, 2020 A Canadian Crypto SRO The Canadian cryptocurrency industry should be one of the strongest in the world, being the birthplace of ethereum , close to the US market, a good bridge from China/HK, generous tax credits for R&D work, and many other advantages. But the industry has been plagued by a poor understanding of regulatory issues, unu...

... POST ► ADDISON CAMERON-HUFF FEBRUARY 11TH, 2020 Canada Stablecorp Launches Canadian Dollar Stablecoin: QCAD Today was the launch of Canada Stablecorp's "QCAD" product, a Canadian Dollar stablecoin available on the ethereum network. The launch was covered by Coindesk and the press release is live here. There's also a short FAQ at stablecorp.ca/faqs. A few of the launch partners put out their own news/press releases, such as Bitvo and Netcoins. The news was also carried by Yahoo Finance and other outlets today. READ THE REST OF THIS POST ► ADDISON CAMERON-HUFF FEBRUARY 10TH, 2020 Key Laws for Canadian cryptocurrency Companies in 2020 I've been blogging about legal issues for Canada's cryptocurrency / blockchain industry since 2013. In that time, there's been a transition from a focus on payments/commercial issues to areas that are more commonly seen by large enterprises like securities law, sanctions, and Excise Tax Act issues. Below are a few sareas that most frequently come up today with crypto companies, along with the sorts of questions that people have about them. KEY AREAS OF CANADIAN LAW READ THE REST OF THIS POST ► ADDISON CAMERON-HUFF JANUARY 21ST, 2020 Have Canadian Securities Regulators Gone Too Far In Quest To Address cryptocurrency Exchange Risks? The Canadian Securities Administrators (the joint body of Canada's provincial securities regulators) issued guidance on January 16th, 2020 that explains their thinking: the way that nearly all cryptocurrency exchanges operate around the world is in contravention of Canadian securities laws. The interpretation necessary to get there is inconsistent with other jurisdictions and poses risks to the Canadian digital economy outside of the cryptocurrency sphere. This blog post explains what the latest guidance is, why industry players are concerned, and why it's problematic for the future. This is a very long blog post because of the complexity of this issue. Here's a brief table of contents: READ THE REST OF THIS POST ► ADDISON CAMERON-HUFF JANUARY 6TH, 2020 Could blockchain Be The Next Gambling For Canada's First Nations? In the late 1990s the Mohawaks of Kahnawake, near Montreal, opened Canada's first data centre located on First Nations territory and enacted their ow...

...at might be the next digital business opportunity for First Nations? LEARNING FROM THE ONLINE GAMBLING EXAMPLE READ THE REST OF THIS POST ► ADDISON CAMERON-HUFF NOVEMBER 12TH, 2019 Recent Developments in Canadian blockchain Law: November, 2019 This article is a round-up of recent developments in Canadian blockchain law: A novel bitcoin investment fund ("The bitcoin Fund") put forward by 3iQ Corp. was approved by the OSC Upcoming changes to the Excise Tax Act to clarify virtual currency sales tax treatment Changes to take effect next summer regarding virtual cur...

... investors may be able to recover their money through civil actions against the offerors, either in parallel or following up on, government efforts. This is a path to recovery that's received much less notice within cryptocurrency efforts than the high-profile cases brought by securities regulators, such as the ongoing Kin litigation (which involves a SAFT too). READ THE REST OF THIS POST ► ADDISON CAMERON-HUFF JUNE 1ST, 2019 Digital Law for a Digital World, Creating a Better Legal System in Canada We need a new system of law publishing in Canada: Digital Law. Digital Law is a change in the way laws are made available to the public, not a change in the structure of our legal system or the entities that create the law. READ THE REST OF THIS POST ► ADDISON CAMERON-HUFF MAY 13TH, 2019 Why Is Legal Advice So Expensive in Ontario? This article isn't about blockchain law (my day-to-day work and usual subject of this blog). It's about a much bigger issue. READ THE REST OF THIS POST ► ADDISON CAMERON-HUFF MAY 10TH, 2019 Large-Scale Money Laundering Is Old-Fashioned, Not Done Using cryptocurrency In BC, an expert panel commissioned by the provincial government has estimated that $5.3 billion/year is laundered through real estate transactions (pg. 54): https://news.gov.bc.ca/files/Combatting_Money_Laundering_Report.pdf. Even if every single cryptocurrency trade in Canada was done by criminals for the purpose of money laundering, it wouldn't come close to the scale of money laundering in BC, in one year, using real estate. For years now I've been on panels where people bring up money laundering using cryptocurrency (always without evidence). To the extent that anyone took this idea seriously, they've apparently been looking in the wrong place. I hope that this new research about money laundering helps refocus C...

... discussion, but I hope that this article about assumptions will help others who are responding to the CSA/IIROC before the May 15th deadline. READ THE REST OF THIS POST ► ADDISON CAMERON-HUFF APRIL 29TH, 2019 Toronto blockchain Week 2019: Synopsis Toronto blockchain Week was a huge success last week. We managed to rally our vibrant, diverse community of educators, businesspeople, developers, government, and the public, to attend 47 different events across Toronto. Thousands of people attended the week's events, and I was impressed by the calibre of the events I attended (unfortunately there were so many that I only attended about a third of them). Here are just a few of the organizations that ran/helped run events last week: READ THE REST OF THIS POST ► ADDISON CAMERON-HUFF MARCH 26TH, 2019 Creative Destruction Lab's blockchain Incubator: Starts July 22nd The Creative Destruction Lab, located at U of T's Rotman School of Management, has launched a blockchain -focused incubator program. The program offers mentorship and (up to) $100k USD of investment, in exchange for an equity stake. READ THE REST OF THIS POST ► ADDISON CAMERON-HUFF MARCH 17TH, 2019 3iQ bitcoin Fund Proposal Denied By OSC, Application Filed For Hearing The Ontario Securities Commission (OSC) released its decision to refuse to issue a receipt for a proposed NRIF (see below) investment product called "The bitcoin Fund" last month. The fund is being put forward by the tenacious team at 3iQ Corp., who on Friday filed an application requesting a hearing about the refusal. The application contains further details...

...t of thought into these issues, and they've included operational details in the application that are interesting notes about the state of the industry in Q1 2019. For example, paragraphs 38-49 discuss their proposed bitcoin valuation methodology and why, in their view, it conforms to NI 81-106. READ THE REST OF THIS POST ► ADDISON CAMERON-HUFF MARCH 11TH, 2019 Business Idea: A Locally-Encrypted Legal Platform Like Clio...

...tion? The rest of this blog post talks about one possible way of addressing confidentiality in the era of cloud software tools for lawyers. READ THE REST OF THIS POST ► ADDISON CAMERON-HUFF MARCH 10TH, 2019 Toronto blockchain Week: April 22nd to 28th Toronto will be celebrating Toronto blockchain Week (TBW) from April 22nd till 28th. The website for TBW is https://www.toronto blockchain week.io and the reaction to its launch last week has been very positive. Toronto has a lot to effort to the nascent blockchain industry. READ THE REST OF THIS POST ► ADDISON CAMERON-HUFF MARCH 6TH, 2019 The Role of Stolen Payment Credentials in Crypto Banking Problems The most common question I've heard from clients over the last five years of working with the crypto industry in Canada is: “How does my company get a bank account?” One of the reasons why it's so hard to get a bank account for a cryptocurrency -related company is the prevalence in Canada of stolen payment credentials (debit/credit card information). Most people who I ask about this crime says it's happened to them. In a study by Canada's Chartered Professional Accountants, approximately 1/3 of Canadians said they'd been a victim of this crime. The rest of this blog post will explain how this commonplace crime is connected to the difficulties that companies have had in opening business bank accounts in the virtual currency ( cryptocurrency ) space. READ THE REST OF THIS POST ► ADDISON CAMERON-HUFF FEBRUARY 6TH, 2019 blockchain Governance and the Public Interest Standard Many concepts sound great in theory but become thorny in practice. One of those concepts is the idea of the "public interest". The term has existed as a principle for good government, in various forms, for thousands of years and it's widely used in law. In a recent blog post, a well-known ethereum developer implicitly put forward the idea that public blockchain s ought to be run in the "public interest". But what does the term mean and is that a standard that ought to be at the heart of ethereum , or any other public blockchain ? It's a concept that's widely used in law. Why not for ethereum ? The term "public interest" appears in ethical guides, statutes, and administrative law textbooks all over the world. But this simple term hides a complicated reality. Few people agree on what the "public interest" is, how to identfiy it, or how to know when something isn't in the public interest. This is a standard that opens the door to debate, rather than providing a standard in the sense of ethereum 's ERC-20, technical standards, or really anything that programmers would say is a "standard". What lawyers and regulators call a "standard" might surprise people who are not familiar with the thousands of pages of scholarship on various sorts of "standards" in law (e.g. Canadian administrative law). READ THE REST OF THIS POST ► ADDISON CAMERON-HUFF JANUARY 30TH, 2019 Toronto's blockchain Lawyers: A Growing List (January, 2019) Toronto has an impressive and growing group of legal professionals who work in the blockchain space. This blog post is an attempt to list the people and their areas of focus (see the end of the table for the inclusion criteria and disclaimers). Lawyer's Name % blockchain (Approximate) Brief Overview Of Their blockchain Work Aaron Grinhaus 10-20 Tax, securities and commercial law Addison Cameron-Huff 100 Legal executive for blockchain companies (commercial/corporate) Ana Badour 15 AML, payments law and financial services regulation Binh Vu More Than 10 Companies going public and corporate financing Chetan Phull 95 Regulations, cro...

...nture capital and securities compliance Geoff Rawle More Than 10 Cross-border STOs, trading platforms, and funds work Ian Palm 20 Capital raising, M&A and commercial advice James Longwell 10 Protecting and reviewing blockchain intellectual property Jason Saltzman More Than 10 Securities law and compliance matters Laura Gheorghiu 10 Tax advice for Canadian tech companies Lori Stein 13.5 Advises cryptoasset investment funds ...

... JANUARY 25TH, 2019 The Non-Fungible Token (NFT) License Agreement Canadian company Dapper Labs Inc. has a new license to share with the world: version 2 of the "NFT License". This license relates to a special kind of ethereum "token" pioneered by the company using their popular game/marketplace: CryptoKitties (further information here). READ THE REST OF THIS POST ► ADDISON CAMERON-HUFF JANUARY 23RD, 2019 Who Manages ethereum Mining? Are They A Good Target For Litigation Or Regulation? Who runs ethereum ? Who's accountable for what happens on the ethereum network? This is the first in a series of blog posts exploring this topic. READ THE REST OF THIS POST ► ADDISON CAMERON-HUFF JANUARY 23RD, 2019 The FCA (UK) Is Consulting on Cryptoassets The UK's financial industry regulatory body, the Financial Conduct Authority, is consulting on "cryptoasset" regulation until April. They've issued a document that contains their views on various aspects of the industry and how they might be regulated. READ THE REST OF THIS POST ► ADDISON CAMERON-HUFF JANUARY 14TH, 2019 New law practice: 100% focused on cryptocurrency and blockchain I've started a new law practice that's 100% dedicated to serving the blockchain /crypto market. The launch was been covered on Friday by bitcoin Magazine: https:// bitcoin magazine.com/articles/canadas-first-all-crypto-legal-firm-opens-its-doors-to-global-clientele/. The firm was officially opened on the 10th anniversary of the bitcoin genesis block, January 3rd, 2019. I'm excited to be able to work full-time in this industry as cryptocurrency enters its second decade. From 2013-2017 I ran a technology law practice that slowly transformed into a cryptocurrency -focused law practice. The law practice was very successful, serving around 150 clients, primarily located in Ontario. But it was a bit too busy. In the fall of 2018 I was faced with the choice of either expanding my practice (i.e. hiring associates or adding partners), joining a larger firm, or doing something more radical. Around this time one of my key clients, ethereum co-founder Anthony Di Iorio, expressed an interest in having me change my role from outside counsel to inside counsel. In 2017 Anthony made me an offer to join Decentral Inc., his main corporation, as its Chief Legal Officer. Within two months I was promoted to President and took on a general management role. READ THE REST OF THIS POST ► ADDISON CAMERON-HUFF DECEMBER 3RD, 2018 Blogging: Why the Gap? My last blog post was in August, 2017. The reason why there hasn't been other posts since then is that I became the President of Decentral Inc. At Decentral I led the development of a next generation cryptocurrency wallet (jaxx.io) and many other exciting projects. I built up the company to 35 employees, increased revenue by millions of dollars a year, released a major new platform, and helped nearly a million people around the world to interact with their cryptocurrency . I didn't have time for personal blogging. READ THE REST OF THIS POST ► ADDISON CAMERON-HUFF AUGUST 31ST, 2017 ICOs: Thoughts on CSA Staff Notice 46-307 Last week the CSA published a staff notice on ICOs (token crowd sales) and cryptocurrency funds. This week my thoughts on that staff notice were published in bitcoin Magazine: https:// bitcoin magazine.com/articles/op-ed-planning-ico-canada-here-are-10-regulatory-points-ponder/. The actual staff notice, titled “CSA Staff Notice 46-307 cryptocurrency Offerings” can be read here. READ THE REST OF THIS POST ► ADDISON CAMERON-HUFF AUGUST 14TH, 2017 VC vs. ICO In an hour I'll be speaking on a panel at the bitcoin & ethereum Summit. The topic for the panel is ICO vs. VC. As a prelude to the talk, here's a table that compares venture capital (VC) investment with initial token offerings (ITO)/initial coin offerings (ICO) s...

...against anyone involved in The DAO. The full report can be read here: https://www.sec.gov/litigation/investreport/34-81207.pdf. READ THE REST OF THIS POST ► ADDISON CAMERON-HUFF JUNE 4TH, 2017 Toronto's Most Technical blockchain Law Event On March 20th Donald Johnston (Aird & Berlis) and I ran an event with OsgoodePD titled “Critical and Emerging Issues in blockchain Law”. This is my recap of what was covered. READ THE REST OF THIS POST ► ADDISON CAMERON-HUFF JUNE 3RD, 2017 FlatLaw.ca Traffic Statistics I created flatlaw.ca in 2013 shortly after starting up my ...

...out 125 people tune in and they've kindly permitted me to distribute the slides. A webcast will also be made available next week on their Vimeo page. READ THE REST OF THIS POST ► ADDISON CAMERON-HUFF APRIL 3RD, 2017 bitcoin Magazine Article on Tokenization of Real World Assets My article on “tokenization” of real world assets was published by bitcoin Magazine on Friday. From the introduction: “Tokenization is the process of converting rights to an asset into a digital token on a blockchain . There is great interest by financial intermediaries and technologists around the world in figuring out how to move real-world assets onto blockchain s to gain the advantages of bitcoin while keeping the characteristics of the asset.” READ THE REST OF THIS POST ► ADDISON CAMERON-HUFF MARCH 21ST, 2017 Key Canadian Laws for blockchain Companies Yesterday I spoke at the OsgoodePD mini-conference on “Critical and Emerging Issues in blockchain Law”. One of the items I covered was a brief highlight of laws that are often relevant to blockchain companies. Here are the statutes: 1. Federal anti-money laundering law: Proceeds of Crime (Money Laundering) and Terrorist Financing Act. Note that there's also a Quebec law that might be relevant. ...

...rencies today. Much of the paper consists of an excellent history of bank notes. But the paper also contains claims about digital currencies, specifically, private, non-Central Bank affiliated digital currencies like bitcoin . This blog post explains why the working paper's Lesson 1 claim about digital currency counterfeiting is not correct. The working paper states that bank notes have always been counterfeited. They then go on to explain several problems with digital currencies that have nothing to do with counterfeiting (such as "fraud" and "cyber attacks") and conclude with: READ THE REST OF THIS POST ► ADDISON CAMERON-HUFF FEBRUARY 27TH, 2017 What Can You Do With bitcoin ? Here's What I've Bought with bitcoin bitcoin hit new record highs recently ($1600 CAD), in part based on speculation about bitcoin ETFs. Although some people look at bitcoin as in investment, other people use it as a payment method. What sorts of things can you buy with bitcoin ? In recent months I've heard of people using bitcoin for: READ THE REST OF THIS POST ► ADDISON CAMERON-HUFF FEBRUARY 17TH, 2017 The Delaware Court of Chancery Also Likes blockchain The Delaware Court of Chancery (leading corporate law court in the US) ruled on Wednesday in a case that involved miscounting of shares as part of a buyout of Dole. In a footnote the court notes that blockchain technology would be a good solution to one of the key issues in the case: “[D]espite laudable and largely successful efforts by the incumbent intermediaries to keep the system working, the problems have grown. ... Distributed ledger technology offers a potential technological solution by maintaining multiple, current copies of a single and comprehensive stock ownership ledger.” - Footnote #1, pgs. 8-9 READ THE REST OF THIS POST ► ADDISON CAMERON-HUFF JANUARY 2ND, 2017 blockchain -Based Companies: How Rwanda Could Out-Compete Delaware Delaware is the corporate capital of the United States. It has more corporations than residents. Many jurisdictions would like to follow in Delaware's footsteps and become a hub for incorporations (one benefit: ongoing registration fees). And in 2017 there's an opportunity to use technology to leapfrog Delaware and create a global corporate hub. This blog post lays out how Rwanda could create a Delaware-beating infrastructure based on blockchain technology (also called "Distributed Ledger Technology"). Added bonus: Rwanda create a new class of online corporation with publicly traded securities. READ THE REST OF THIS POST ► ADDISON CAMERON-HUFF DECEMBER 15TH, 2016 Corporate Voting via blockchain - Major Corporate Investments and Looking Forward Last week I spoke about blockchain -based corporate voting (and other topics) at the “ blockchain Symposium” held by Gowlings WLG in Toronto. This blog post expands on that discussion and explains why I think corporate voting via blockchain will be reality within the next few years. Corporate voting is just one aspect of the large constellation of service companies that handles ownership, registration, transfer, settlement, clearing, and other functions of the public securities markets. What's going on in the world of securities management/investor communications? READ THE REST OF THIS POST ► ADDISON CAMERON-HUFF DECEMBER 13TH, 2016 Bay St. Banks Embrace blockchain : Job Ads TD is looking for a manager for their "Enterprise Shared Platform of blockchain Center of Excellence". The position "reports to the VP, blockchain CoE to support the business priorities of the blockchain CoE." The ad was posted a month ago: https://www.linkedin.com/jobs/view/236085965. READ THE REST OF THIS POST ► ADDISON CAMERON-HUFF DECEMBER 6TH, 2016 Federal Reserve Paper on blockchain Technology The US Federal Reserve published a paper this week on the application of blockchain technology to the payments, clearing and settlement sectors of the US financial system. The paper is an excellent overview of the current system and how blockchain might change things. Section 2.1 provides explanations of payment processing, securities post-trade processes and the roles of financial intermediaries. From the section on settlement: READ THE REST OF THIS POST ► ADDISON CAMERON-HUFF OCTOBER 15TH, 2016 Starting a blockchain Software Company: 65 Point Legal Checklist Starting a blockchain software business? Below is a checklist of some of the legal & business issues common to this emerging industry. 1. CODE    ☐ Build off an existing platform like ethereum or create a new blockchain platform?       ☐ Generally don't need permission to build but banks are keen on "permissioned" blockchain s and integration partners may require agreements    ☐ Open source or closed source? Generally " blockchain " = open source but there are other models (e.g. R3).       ☐ A combination of open source and closed source? Which parts?    ☐ How will the blockchain be used? How will the software be used? Which open source license is most appropriate?    ☐ Who will own contributions to the code? Will there be a "contributor license agreement"? Assignment?    ☐ W...

...e Ontario Highway Transport Board and poses seven questions. My answers are at the end of this blog post. READ THE REST OF THIS POST ► ADDISON CAMERON-HUFF JULY 8TH, 2016 McKinsey Report on Insurance Industry + blockchain McKinsey & Company (a prominent consulting firm) has released a report on the application of blockchain technology to the insurance industry. READ THE REST OF THIS POST ► ADDISON CAMERON-HUFF JULY 5TH, 2016 The DAO: Status Update "The DAO" was an attempt to create a virtual currency investment fund on the ethereum network. I wrote about it from a legal perspective back in May. In the month following my blog post, The DAO reached over $150 million USD in value and was then hacked. READ THE REST OF THIS POST ► ...

...e more interesting word pairs. READ THE REST OF THIS POST ► ADDISON CAMERON-HUFF MAY 9TH, 2016 Critique of Slock.it DAO Paper A "Decentralized autonomous organization ('DAO')" white paper has been published by German blockchain company Slock.it UG. This white paper is part of a larger conversation that's been going on for a few years in the bitcoin / blockchain world. The basic idea is to build a software program that runs like a company, but on a decentralized software platform (e.g. ethereum ). Slock.it's paper is one of the longer contributions to this effort (31 pages, including code examples). This blog post details a few thoughts on the Slock.it proposal, from a lawyer's point of vie...

...st private sector jobs for similar roles don't have posted salaries but appear to be about $30k/yr higher. READ THE REST OF THIS POST ► ADDISON CAMERON-HUFF MARCH 21ST, 2016 Food for Thought from CIGI Roundtable on blockchain Regulation Last week I attended a roundtable put on by CIGI in Toronto titled “Regulating blockchain & Distributed Ledger Technologies: Challenges and Opportunities for Canadian Innovation”. Speakers included key people from industry, government and academia. I've distilled my notes about speakers' thoughts and my own reflections into 18 questions. Please note that the roundtable was conducted under a rule of not crediting speakers - the thoughts below are mostly not my own. When we talk about regulation, what are we talking about? (Smart contracts, industry standards, technical standards, regulations, acts, common law, etc.?) What are the benefits of blockchain s right now? What will the future benefits be? What might the downsides be? Who should be trusted? Banks? bitcoin exchanges? Programmers? Do parties that require trust also require government-created rules? Will we still have banks in 30 years? What about other intermediaries? Who will take a cut of future blockchain transactions? Which intermediaries? Government authorities? Will government authorities take a cut of transactions directly? (i.e. X% of each transaction goes to the CRA) Governments have an impulse to regulate. Will new regulations mean giving up the benefits of blockchain or giving up Canada's place in the global market? What are the implications of "programmable trust"? Will we have a future where government functions are transferred to private interactions (i.e. smart contracts) administered through blockchain s? What role is there for the (Canadian) government to play as a partner rather than a regulator? Which activities should be governed by criminal law and which by a lighter touch (fines, AMPs, etc.)? Is a lack of a regulation in the blockchain space a "gap" in the law or an opportunity for entrepreneurs? Can regulatory "gaps" be filled with common law and economic behaviour rather than government-prescribed rules? Are there any gaps that cannot be filled by private actors or court-created law? Should blockchain developers be expected to assist government in their traditional roles of law enforcement and taxation? Are the differences between "public" and "private" blockchain s important to regulators? What are the jurisdictional challenges to a decentralized global economic system enabled by blockchain s? Is there a breaking point in which blockchain benefits (in the form of talented humans making these systems) migrate to less regulated countries? What can be done to ensure that "good" regulations are made by the federal and provincial governmen...

...million hectolitres of beer consumed in Ontario, grocery stores will be able to sell a maximum of 163,300 - around 2% of total beer sales. READ THE REST OF THIS POST ► ADDISON CAMERON-HUFF SEPTEMBER 17TH, 2015 blockchain Gambling One of the first applications of bitcoin was online gambling because gambling companies have a hard time with a) chargebacks; and, b) the legality of their services. The earlier pioneers in bitcoin gambling all suffered from a problem of centralization: there was always a single website that gamblers had to use and trust. Recent innovations like Augur and ethereum are changing the dynamic. A new service called Augur (built on top of ethereum ) has been getting a lot of media attention and apparently racing bookies are concerned: http://www.racingpost.com/news/...

"Seven Trends In blockchain To Affect Canadian Regulation in 2021" by Addison Cameron-HuffADDISON CAMERON-HUFF, cryptocurrency LAWYER BLOG HOME CONTACT AUTHOR NEXT POST: SOLVING THE SMALL ISSUER PROBLEM IN ONTARIO: TH... Thoughts and opinions of a Toronto-based blockchain lawyer. Follow @aCameronhuff DECEMBER 8TH, 2020 Seven Trends In blockchain To Affect Canadian Regulation in 2021 Here are seven trends happening in the world of blockchain that may affect Canadian and American regulation in the coming years: on-chain insurance, prediction markets, decentralized exchanges, collectibles, digital dollars, securitization and leverage. #1 ON-CHAIN INSURANCE At the end of last year the French insurance giant AXA (~$100 billion EUR in 2019 revenue) shuttered a little noticed division that created a flight cancellation insurance product called "Fizzy". Fizzy ran on the ethereum blockchain and had customers but failed to meet "commercial targets". A victim of being too early to market? This product should be a wake up call to insurers who think that blockchain products won't create the same sort of global competition created by Uber taking on taxi companies. Whether the challenge comes from international giants like AXA in France or a tiny startup based in Hyderabad, I expect this will eventually have ramifications on the regulation of insurance. #2 PREDICTION MARKETS It's a short jump from insurance to gambling, and in particular the area known as "prediction markets", pioneered by a now defunct Irish company called Intrade. The cryptocurrency version of this is projects like Augur that permit on-chain betting on events. Although there's a regulatory difference, technologically-speaking these platforms can look a lot like derivatives markets (and may even offer trading in derivatives). They are cheaper, more understandable (where there's open source code), globally accessible, and difficult to shut down. Governments may react by loosening restrictions on gambling. #3 DECENTRALIZED EXCHANGES Uniswap is a decentralized exchange ("DEX") that has upended cryptocurrency trading by bring the model created by Bancor to a wider audience. Uniswap is now being used for tens or hundreds of millions of dollars a day worth of cryptocurrency trades using "liquidity pools" instead of an order book. Uniswap's success has spawned new interest in creating on-chain trading systems that can be used for a wide variety of assets. Although not useful for fiat movements, these platforms intersect with other trends like digital dollars (see below) that many people think is the future of other kinds of trading. These sorts of services also challenge the MSB regulatory system as they are unregistered with AML authorities, resting on the (debatable) legal theory that they are decentralized. #4 COLLECTIBLES The Canadian developer of 2017's ethereum -based "CryptoKitties" collectibles has launched a new blockchain named Flow and a new NBA-licensed collectible system called NBA Top Shot. NBA Top Shot is a very well-produced multimedia collectibles game that's a new twist on collectible cards. Many people laughe...

...he success of early pioneer USDT. Stablecoins can be expected to make a significant impact on the global payments/money regulatory system in the coming years (whether public, private, or both). #6 SECURITIZATION ethereum will soon be traded in securitized form in Canada through 3iQ's "Ether Fund", which follows the success of their earlier bitcoin Fund. These securitized cryptocurrency products (some eligible for registered accounts) are being launched all over the world and have seen enormous inflows of money. In the United States these products have attracted over $10 billion, and as they become more popular will likely have an impact on securities regulation. 3iQ's protracted legal campaign to get the bitcoin Fund launched in Canada shows the reluctance of Canadian regulators about these products, but their success may change some minds in the government who may be looking for post-COVID growth industries. Canada is well-placed to become a global leader in this field, but it wouldn't be surprising to see a much larger global asset manager buy out 3iQ or other Canadian pioneers as they prove the model. #7 LEVERAGE Algorithmic stablecoins like MakerDAO are often used to create leverage for cryptocurrency speculation, and the creation of "flash loans" this year will likely accelerate the trend of on-chain leverage. Flash loans through Aave and DyDx plu longer term leverage through algorithmic stableco...

...se of technological change, I expect to see more leverage in more places. Conclusion Whether it's collectibles, leverage, CBDCs, insurance, or DEXs, or a combination of them, the rapid pace of development in blockchain -based products is sure to cause regulatory shifts in 2021. The Bank of Canada hired several staff people in the summer to work on their CBDC project, and few people who've been through 2020 can say they expect technological development to slow in 2021. How consumers, businesses, and regulators will react is much less predictable, but regulatory change is a good bet. NEXT: SOLVING THE SMALL ISSUER PROBLEM IN ONTARIO: TH... ► BLOG HOME This blog is by Toronto cryptocurrency lawyer Addison Cameron-Huff. If you would like legal advice please contact reception@cameronhuff.com. The above content is legal information, not legal advice. You should hire a lawyer if you would ...

"Starting a blockchain Software Company: 65 Point Legal Checklist" by Addison Cameron-HuffADDISON CAMERON-HUFF, cryptocurrency LAWYER BLOG HOME CONTACT AUTHOR NEXT POST: CFA SOCIETY FINTECH CONFERENCE ON JUNE 17TH, 2016” Thoughts and opinions of a Toronto-based blockchain lawyer. OCTOBER 15TH, 2016 Starting a blockchain Software Company: 65 Point Legal Checklist Starting a blockchain software business? Below is a checklist of some of the legal & business issues common to this emerging industry. 1. CODE    ☐ Build off an existing platform like ethereum or create a new blockchain platform?       ☐ Generally don't need permission to build but banks are keen on "permissioned" blockchain s and integration partners may require agreements    ☐ Open source or closed source? Generally " blockchain " = open source but there are other models (e.g. R3).       ☐ A combination of open source and closed source? Which parts?    ☐ How will the blockchain be used? How will the software be used? Which open source license is most appropriate?    ☐ Who will own contributions to the code? Will there be a "contributor license agreement"? Assignment?    ☐ What about supporting assets like images, videos, etc.? Written agreements will help avoid conflicts later and ensure that a departing individual doesn't take their work with them. 2. TOKENS    ☐ Will the software use a new token? What will it do?       ☐ Will the tokens exist within an existing software system like ethereum ? Or a new platform?    ☐ Will the tokens be sold in advance of the product launch? (an "Initial Coin Offering" or "crowdsale")    ☐ What are the implications of selling the tokens? Is it a sale of "s...

...reements can help avoid conflict later on.    ☐ Will there be a product pre-sale?       ☐ Will it be a traditional product pre-sale like Kickstarter?       ☐ Will it be an "initial coin offering" (ICO)? Modelled on the ethereum sale?       ☐ When will the product be delivered?       ☐ Is securities advice necessary?       ☐ What sort of documentation will purchasers be given?    ☐ Will there be external investors?       ☐ A...

...nders (if any) want patents?    ☐ Are patents desirable?    ☐ Should the patents be licensed to the community? e.g. DPL. 11. ACCOUNTING    ☐ How will money be tracked within the organization? Cryptocurrencies (e.g. bitcoin ) use multiple addresses rather than a single business bank account and may require different processes than a traditional business.    ☐ How will expenses and income be tracked? Who will be responsib...

...s to actions in this space. Speak to a lawyer about your specific situation or the business you're considering starting. NEXT: CFA SOCIETY FINTECH CONFERENCE ON JUNE 17TH, 2016 ► BLOG HOME This blog is by Toronto cryptocurrency lawyer Addison Cameron-Huff. If you would like legal advice please contact reception@cameronhuff.com. The above content is legal information, not legal advice. You should hire a lawyer if you would ...

"McKinsey Report on Insurance Industry + blockchain " by Addison Cameron-HuffADDISON CAMERON-HUFF, cryptocurrency LAWYER BLOG HOME CONTACT AUTHOR NEXT POST: THE DAO: STATUS UPDATE Thoughts and opinions of a Toronto-based blockchain lawyer. JULY 8TH, 2016 McKinsey Report on Insurance Industry + blockchain McKinsey & Company (a prominent consulting firm) has released a report on the application of blockchain technology to the insurance industry. The second half of the report is a great overview of some of the projects being developed by blockchain startups: Tradle (built on bitcoin ), InsureETH (P2P insurance), Dynamis (P2P insurance), and Blockverify (anti-counterfeiting). Although curiously the report doesn't mention ethereum , the software platform upon which most of these startups are built (and which itself is under heavy development). The first half of the report is a good overview of what blockchain s are. My only quibble with their overview is that blockchain s aren't necessarily "immutable" in the way they describe. blockchain blocks are only immutable so long as there is consensus (amongst the people running the software that creates the blockchain ) that the blockchain should remain immutable. The ethereum developers are debating making changes to the ethereum software that would alter past transactions connected to "The DAO" (i.e. a "hard fork"). blockchain s aren't magic. They exist due to software and software can be changed. The key to understanding why blockchain date is almost always immutable in practice is understanding how the larger system works, including the economic incentives for mining. I would recommend that insurance companies (or anyone else) looking into blockchain solutions ask questions about the underlying blockchain . Is it the bitcoin blockchain ? ethereum ? A private system? Each of these have very different characteristics that bubble up to the software (such as a smart contract) running on top of the blockchain . An excellent word of caution near the end of the report: blockchain is a technology ready for exploration by insurers. But its exploitation is still a long way off.. NEXT: THE DAO: STATUS UPDATE ► BLOG HOME This blog is by Toronto cryptocurrency lawyer Addison Cameron-Huff. If you would like legal advice please contact reception@cameronhuff.com. The above content is legal information, not legal advice. You should hire a lawyer if you would ...

"Starting A cryptocurrency Business in Canada: Buying & Selling" by Addison Cameron-HuffADDISON CAMERON-HUFF, cryptocurrency LAWYER BLOG HOME CONTACT AUTHOR NEXT POST: DRAFTING CONTRACTS FOR cryptocurrency CLIENTS” Thoughts and opinions of a Toronto-based blockchain lawyer. SEPTEMBER 20TH, 2021 Starting A cryptocurrency Business in Canada: Buying & Selling This blog post addresses the entrepreneur looking at starting a company to buy and sell cryptocurrency ("virtual currency" under AML laws) like bitcoin , ethereum , and the myriad tokens that have been launched. There are three main areas of regulation in Canada; virtual currency dealers, securities, and tax. VIRTUAL CURRENCY DEALERS Most businesses that buy and sell cryptocurrency must be registered as virtual currency dealers with FINTRAC. This is a federal system that's relatively easy to understand and comply with (as compared to the securities laws covered further below). ...

...rs with expertise in this area. Some companies might also need special assistance with Quebec's AMF (which overlaps with FINTRAC in this area for Quebec-only). The AMF is also involved in the securities side of cryptocurrency . SECURITIES Sometimes this issue is framed to me as being about "security tokens" but that's usually the wrong focus. It's not that there are security tokens and non-security tokens, but rather tha...

...nts, which is essential for ensuring good processes. As the industry matures and expands I expect the professional teams required will continue to expand and become even more specialized. NEXT: DRAFTING CONTRACTS FOR cryptocurrency CLIENTS ► BLOG HOME This blog is by Toronto cryptocurrency lawyer Addison Cameron-Huff. If you would like legal advice please contact reception@cameronhuff.com. The above content is legal information, not legal advice. You should hire a lawyer if you would ...

"How bitcoin Might Change Your Paycheque" by Addison Cameron-HuffADDISON CAMERON-HUFF, cryptocurrency LAWYER BLOG HOME CONTACT AUTHOR NEXT POST: bitcoin SCRIPTS” Thoughts and opinions of a Toronto-based blockchain lawyer. AUGUST 5TH, 2014 How bitcoin Might Change Your Paycheque People are paid every two weeks because it's too expensive to pay people daily. I mean too expensive both in the sense of administrative overhead (if people are paid manually) and transaction fees (cheques/EFT fees). bitcoin offers the potential to pay people daily or even hourly because transaction fees are reduced to near zero. Here's an interesting article that explores this concept and the idea of paying for performance using bitcoin / ethereum : https://medium.com/@spencernoon/paycheck-2-0-385cf6c70ec7. NEXT: bitcoin SCRIPTS ► BLOG HOME This blog is by Toronto cryptocurrency lawyer Addison Cameron-Huff. If you would like legal advice please contact reception@cameronhuff.com. The above content is legal information, not legal advice. You should hire a lawyer if you would ...

"Have Canadian Securities Regulators Gone Too Far In Quest To Address cryptocurrency Exchange Risks?" by Addison Cameron-HuffADDISON CAMERON-HUFF, cryptocurrency LAWYER BLOG HOME CONTACT AUTHOR NEXT POST: COULD blockchain BE THE NEXT GAMBLING FOR CANAD...” Thoughts and opinions of a Toronto-based blockchain lawyer. JANUARY 21ST, 2020 Have Canadian Securities Regulators Gone Too Far In Quest To Address cryptocurrency Exchange Risks? The Canadian Securities Administrators (the joint body of Canada's provincial securities regulators) issued guidance on January 16th, 2020 that explains their thinking: the way that nearly all cryptocurrency exchanges operate around the world is in contravention of Canadian securities laws. The interpretation necessary to get there is inconsistent with other jurisdictions and poses risks to the Canadian digital economy outside of the cryptocurrency sphere. This blog post explains what the latest guidance is, why industry players are concerned, and why it's problematic for the future. This is a very long blog post because of the complexity of this issue. Here's a brief table of contents: 1. What guidance was issued? 2. How does the CSA want cryptocurreny exchanges to operate? What do they consider to not be within the realm of securities laws? 3. What is the importance of "immediate delivery" in the CSA guidance? 4. What should cryptocurrency exchanges avoid doing, according to the CSA? 5. Why is this guidance surprising? How does it compare to other rule-making processes? 6. Why is the CSA doing this? How does this relate to "securitie...

...SSUED? CSA Staff Notice 21-327, "Guidance on the Application of Securities Legislation to Entities Facilitating the Trading of Crypto Assets", sets out the views of Canada's securities regulators with regard to how cryptocurrency exchanges delivery cryptocurrency to buyers. More specifically, the guidance explains the view that all cryptocurrency vendors/markets that don't deliver cryptocurrency "immediately" are likely dealing in securities, and are thus on the wrong side of the law. What's surprising about this guidance is that it goes beyond digital assets that are securities and instead is about platforms that involve buying or selling bitcoin , Ether, and other cryptocurrencies that aren't generally regarded by practitioners or regulators as being securities (because they don't meet the various legal tests for what a security is). The CSA guidance focuses on the nature of how customers obtain the digital assets, and zooms in on the length of time between a buy order and the ultimate delivery of the cryptocurrency into an customer-controlled wallet: "We generally will consider that there will be an obligation to immediately deliver if the contract or instrument creates an obligation on the Platform to immedia...

...onsiders to be an ideal example that would not be considered within the scope of securities legislation (at the bottom of page 3). One of the requirements in the example nixes one of the most common models for selling cryptocurrency by requiring that "users send money to the Platform to purchase bitcoin at a given price". Most people don't send money to a platform to buy cryptocurrency at a given price, instead, they put in a market order (after transferring money to the platform because wire transfers can take days to receive) so that they can buy cryptocurrency at the market price, and not what the market price used to be (because markets are global and fluctuate quickly). Another requirement in the ideal example is that the cryptocurrency has to be transferred to a user wallet, immediately, on a blockchain (not the private books of the company operating the service). According to this ideal example, that would rule out an exchange that allows users to buy and sell without having to transfer cryptocurrency in and out of a a wallet. Why is the transfer important to end users? At today's cryptocurrency network fees, a $0.10 or $1 transaction fee probably won't make this non-viable, but in the past fees have been upwards of $25 per transaction at peak times. There's value in allowing users to hold on a balance on an exchange, and in fact, a great many people prefer to leave cryptocurrency on exchanges rather than transfer it to wallets (and back) because of the complexity (actual or perceived) of using wallets. I think the complexity of wallets is overstated, but there's certainly many people who hold significant amounts of cryptocurrencies "on" exchanges, and they prefer to do this. Although many users aren't well-informed, there are many sophisticated individuals who choose to keep cryptocurrency on exchanges and don't want to have it "immediately delivered", and not for reasons that have anything to do with securities law. It's not necessarily a problem for regulators to say that a business...

...del. Regulations have costs. These particular rules (technically, an interpretation that's not a rule) will have a heavy cost, as can be seen from the example the CSA gives of what they think is off-side. WHAT SHOULD cryptocurrency EXCHANGES NOT DO ACCORDING TO THE CSA? The CSA has staked out a bold position on page 4 of the guidance. Their position is that "immediate delivery" is required of cryptocurrency platforms, and otherwise, the platform is (unlawfully) engaged in the business of trading securities: "For example, if the terms and conditions of a contract or instrument transacted on a Platform o...

...he existing companies out of business. The guidance that was released last week is a new direction for securities regulation, and the primary danger of this move is not whether it will affect the (small) Canadian cryptocurrency industry. The concern should be about regulatory overreach and where securities laws end. Why don't securities laws encompass all economic activity in Canada? Because the economy would grind to a ha...

...he most restrictive and complex system of legal rules in Canada. There are limits to what securities laws cover. Does the new guidance go past the limits? WHY IS THE CSA DOING THIS? The CSA does not like that cryptocurrency activities haven't been carried out by securities dealers. This is evident from the context of this, which is within the wider consultation initiated jointly with IIROC (the organization that regulat...

..."marketplaces" or dealers as defined in securities legislation." There's a bit of assuming the conclusion in this definition, but it certainly telegraphs what the CSA thinks, which is that companies that buy or sell cryptocurrency should be regulated securities market participants, or maybe even something more like a stock market (a "marketplace"). At the same time as the CSA appears to be of the view that securities dealers are the right people to undertake these activities, securities dealers have actually steered clear of cryptocurrency and generally have little interest in this novel but still relatively small industry. There's much more money to be made elsewhere, with far less complexity, risk, etc. There was nothing stopping them from getting involved before, but they didn't. Will securities dealers now get involved in the market? Will existing companies need to change their business models? Will foreign cryptocurrency exchanges comply? The CSA guidance doesn't address these issues, but is clear that they would like this business to be carried on underneath the current regulatory system for securities market partic...

... that the comments were submitted long before this guidance so they're not in response to this guidance but rather in response to the consultation that spawned the guidance. Kraken Kraken is one of the largest cryptocurrency exchanges in North America. They do business in Canada, the US, and elsewhere. On page 2 of their comment there's an on-point submission: "The assertion of jurisdiction over Exchanges is premised on...

...derlying asset - it IS the underlying asset. The application of a securities law framework, accordingly, is both unnecessary and inappropriate to this structure." DV Chain DV Chain is a major player in the Canadian cryptocurrency space. In their comment they point to Ontario Securities Commission rule Rule 91-506 (unofficial consolidation) which specifically excludes derivatives that meet this definition: "a contract or inst...

...way that hasn't to-date been considered a securities transaction: "The meaning of “delivery” for crypto assets is an area which needs further explanation. This is best illustrated by comparing a crypto asset (like bitcoin ) to a traditional commodity (like gold). If a client buys gold from an online platform, and that gold is: • delivered (within a reasonable time frame) to a client approved vault; • the client has f...

... the gold has met the delivery requirement such that it is clearly a commodity and securities legislation does not apply." Bitvo Bitvo is a Canadian crypto exchange based out of Alberta. Bitvo's comment explains why cryptocurrency exchanges (everywhere) don't do immediate delivery to external wallets as the only, or even the default, choice, but they do always have a way of withdrawing if users would like to (and when they would like to): "By requiring actual delivery of crypto assets on completion of each trade without the off-chain option, this would create logistical challenges, timing delays and increased costs as it relates to cryptocurrency -to- cryptocurrency trades as there may be discrepancies in timing of verification on the respective distributed ledger protocol underlying such transfer and the settlement of such transaction. ... Many participants find the current process of handling and managing their own external wallet to be cumbersome or confusing and may take a less intensive approach to the security of their cryptocurrencies than the Platform would. Such participants appreciate a third party, such as the trusted Platform through which they acquired the cryptocurrency , taking care of that element of their cryptocurrency ownership. If a participant loses his or her private key to an external wallet, the cryptocurrencies may be lost forever. If such participant loses his or her password to the Platform, he or she would be able to recover the cryptocurrencies held on such Platform. Furthermore, by not settling every transaction on the applicable blockchain , the Platform and the participants are able to avoid mining verification costs and timing delays associated with the verification of such transactions on-chain. The transaction can occur in real-time and the participant can have the peace of mind that the trade occurred immediately exactly on the terms contemplated." Coinsquare Coinsquare is one of Canada's largest cryptocurrency exchanges. Their comment explains why there are delays involved in delivery and how AML laws may even be the source of delays: "There is no specific challenge associated with the transfer of crypto-...

...ity that operates the Coinsquare exchange, but the Coinsquare logo appears at the top and this is the only comment submitted by any of the Coinsquare entities. Other Opinions There's a wide diversity of views in the cryptocurrency industry. There are also many views from outside the industry that bear on the regulatory future of it and these views can be read in detail by browsing the 51 published comment letters here: https:/...

...irtual currency gift cards where the user receives a code that later leads to an in-game credit? Perhaps the key difference is that the code (which isn't the in-game money) is delivered immediately, whereas on most cryptocurrency platforms the cryptocurrency is only delivered after the user goes through a withdraw process. It's common for digital goods, like tickets to shows, to be delivered long after the purchase date. It would be great if everyone co...

...at the world is going digital. Digital items and digital assets aren't going away. So although today's examples might feel strained, it's hard to see where the line is drawn in the CSA's guidance, other than around cryptocurrency exchanges. This is the kind of rule-making that may have a significant negative impact on the ability of Canada's technology companies to compete globally, or may cause them to simply not serve the ...

... to ask about guidance issued by a securities regulatory organization, but there are reasons to think that the CSA has gone too far in their interpretation of the law. OSC Commissioner Statement on Securities vs. bitcoin Market OSC Commissioner Lawrence Haber wrote in the matter of 3iQ Corp and the bitcoin Fund (2019 ONSEC 37, paragraph 80): "Although this doesn’t impact my conclusion about price manipulation and valuation, it is worth noting that bitcoin is a commodity, not an equity or other security. As such, the bitcoin market should be examined like other commodity markets and not held to the standards applicable to securities markets. The risk of market manipulation exists in all commodity markets. Many of Staff’s stated concerns could apply equally to other commodities, such as precious metals or foreign currencies. Staff did not persuade me that bitcoin is more susceptible to manipulation than other commodity products." The above doesn't contradict the CSA guidance but it shows a tension that exists between regulating securities (as they're general...

...e enforcement action or continue existing enforcement action against Platforms that do not comply with their interpretation of securities legislation." HOW WILL EXCHANGES REACT? WHAT COULD HAPPEN? Canada's cryptocurrency industry is resilient. But it's also quite small, and globally insignificant in cryptocurrency markets. When 95+% of the market is outside of our borders I don't think it's reasonable to expect global compliance with Canada's (unique?) view on how securities laws apply to cryptocurrency exchange. And if this puts Canadian businesses at a disadvantage, it's likely that foreign competitors will eventually put them out of business, and it will certainly hurt the export prospects of thi...

...icies and guidance are sometimes drafted in a confusing or unclear manner. The OSC’s approach to regulation is often too prescriptive and the difference between rules and guidance may not always be clear." WILL cryptocurrency EXCHANGES CAMPAIGN AGAINST THIS VIEW? Unfortunately, Canada's cryptocurrency players are already operating in a challenging business environment and will be hard-pressed to come up with the necessary legal or lobbying resources to provide an alternative interpretation or an alternative regulatory proposal to address the dangers posed by the cryptocurrency exchange model (re: QuadrigaCX). I suspect the real pushback on the CSA's view will come when/if the regulators expand their sights from "crypto assets" to other commodities/digital goods/digital assets/etc. NEXT: COULD blockchain BE THE NEXT GAMBLING FOR CANAD... ► BLOG HOME This blog is by Toronto cryptocurrency lawyer Addison Cameron-Huff. If you would like legal advice please contact reception@cameronhuff.com. The above content is legal information, not legal advice. You should hire a lawyer if you would ...

"Recent Developments in Canadian blockchain Law: November, 2019" by Addison Cameron-HuffADDISON CAMERON-HUFF, cryptocurrency LAWYER BLOG HOME CONTACT AUTHOR NEXT POST: FEDERAL INCORPORATIONS ARE MOSTLY IN ONTARIO AN...” Thoughts and opinions of a Toronto-based blockchain lawyer. NOVEMBER 12TH, 2019 Recent Developments in Canadian blockchain Law: November, 2019 This article is a round-up of recent developments in Canadian blockchain law: A novel bitcoin investment fund ("The bitcoin Fund") put forward by 3iQ Corp. was approved by the OSC Upcoming changes to the Excise Tax Act to clarify virtual currency sales tax treatment Changes to take effect next summer regarding virtual currency dealers (PCMLTFA) Ontario Securities Commission makes clear that "I didn't know it was wrong" won't be accepted going forward OSC Launchpad approves the "FreedomX" secondary market trading platform by the TokenFunder team BC regulation prohibits sellers of "pill presses" from accepting virtual currency Each of the above developments are explained below with links to the decisions/laws. THE bitcoin FUND A win for progressive capital markets players on October 29th: the Ontario Securities Commission (OSC) reversed a staff decision to allow 3iQ Corp. to launch an NRIF for the public to invest in bitcoin through a professionally managed fund. See my earlier post about this fund from when it was denied to read about what an NRIF is and what this case was about: https://www.cameronhuff.com/blog/3iQ- bitcoin -Fund/index.html. I attended the openings for this hearing and was not impressed with the OSC's arguments (much of it not about bitcoin at all), so it was refreshing to see that former securities lawyer Lorie Haber saw the weakness in the government's case and the need for limits on the discretion of OSC staff: I do not agree with Staff’s submission that investor protection under s. 61(1) necessarily extends to a consideration of the assets a fund proposes to hold or the markets in which those assets trade. If that analysis were applied to deny a receipt to the Fund, as Staff submits it should, it would amount to a ban on any funds holding bitcoin , regardless of their structure or management. Further, the length of Staff’s proposed ban would be uncertain. Staff is effectively proposing a ban on funds holding bitcoin that would remain in place until Staff deems the market for bitcoin to have matured enough that Staff’s concerns about the operational risks have diminished. Staff has not provided any authority for imposing such an indeterminate ban. Given that investors have other means of acquiring bitcoin , I question whether the ban proposed by Staff would protect investors from “unfair, improper or fraudulent practices”,[34] as provided for under the Act’s purposes. Instead of ensuring that investors could not invest in bitcoin , denial of the receipt would only ensure that investors could not invest in bitcoin through a public fund. The full decision (2019 ONSEC 37) is worth a read for anyone involved in the capital markets space as it touches upon a number of issues faced by players in Canada and the US ...

...rs as they look for legitimacy by accumulating government licenses/certifications/registrations, especially in light of this year's failure of QuadrigaCX. THE OSC WANTS YOU TO KNOW ABOUT REGISTRATION REQUIREMENTS A blockchain token marketing company called CoinLaunch led by Reuven Cohen settled with the Ontario Securiies Commission in late July. The Commission noted in its decision that not knowing about the Ontario Secur...

...ntract-based exchange: The Secondary Trading Platform will be comprised of an order book displaying buy and sell orders entered by the Participants (the Order Book), with an interface system that utilizes blockchain smart contracts to execute the transactions that occur in the Order Book. The Participants will interact with one another on the Order Book. BC PILL PRESS REGULATION At the beginning of this year a...

...e consideration for the sale of controlled equipment, a cash card, prepaid purchase card or virtual currency. This is a minor law that affects very few people but it is the first I'm aware of in Canada that bans using cryptocurrency for certain transactions. It's unusual for laws to differentiate between payment methods as the focus is usually on the wrongfulness of the transaction, not the means by which it was carried out. STAY IN TOUCH I blog here (https://www.cameronhuff.com/blog) and post to Twitter fairly regularly (@acameronhuff). You can follow this blog by subscribing to its RSS feed: https://www.cameronhuff.com/blog/rss.xml. NEXT: FEDERAL INCORPORATIONS ARE MOSTLY IN ONTARIO AN... ► BLOG HOME This blog is by Toronto cryptocurrency lawyer Addison Cameron-Huff. If you would like legal advice please contact reception@cameronhuff.com. The above content is legal information, not legal advice. You should hire a lawyer if you would ...