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:

The actual staff notice, titled CSA Staff Notice 46-307 Cryptocurrency Offerings can be read here.

There are ten takeways in the article:

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