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://bitcoinmagazine.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.
There are ten takeways in the article:
- Regulators will treat each token on a case-by-case approach
- Substance will trump form when it comes to ICOs
- The CSA thinks many ICOs are securities offerings aimed at retail investors
- The existing legal framework for securities will be applied
- White papers aren’t sufficient disclosure under Canadian securities law
- Regulatory action isn’t the only potential consequence of non-compliance
- Cryptocurrency investment funds ought to follow the rules for funds
- Some token sales are securities offerings, and some token-securities are also derivatives
- Resale restrictions need to be considered for tokens that are securities
- The regulatory focus has shifted from cryptocurrency investment risks to tokens as securities