HomeCommunityCanada Looking To Classify Digital Currencies As Securities

Canada Looking To Classify Digital Currencies As Securities


In studying a number of cryptocurrencies and upcoming ICOs, Canadian authorities have said that the offerings are similar to the sale of securities and as such should have to abide by the tough rules that exist around them – or seek exemptions.

Legal grey area

While digital currencies boom and ICOs pop up with huge regularity across the globe, governments and regulators are trying to incorporate them into an existing legal framework.

Regulators are trying to keep up with the growth in order to create rules to govern them within their borders, while also not stifling the innovative funding model.

The Canadian Securities Administers, an umbrella group of provincial watch-dogs, has noted that any token whose value is tied to future profits or success of a business should be considered a security.

This obviously seems to encapsulate ICOs whose value is indeed set and determined by future profiteering and success.

The regulators said in a statement:

“With the offerings that we have reviewed to date, we have in many instances found that the coins/tokens in question constitute securities for the purposes of securities laws, including because they are investment contracts.”

Ire of the fintech community

The statement released by the regulators has been labeled as unclear and a little ambiguous, although full of threat and menace.

It has prompted some of Canada’s leading fintech executive to criticize and seek clarity from the Canadian Securities Administrators.

“There still is a lot of gray area in terms of the guidance on when a cryptocurrency or token would be a security,” said Daniel Fuke, a partner in the securities and M&A group at Fasken Martineau.

“It would be nice if we could know from CSA what they were thinking in terms of some of the sub-considerations of the securities law test.”

Pressure from the South

South of the border, in the US, their securities authority already made a big call when it announced that Blockchain companies must obey federal laws because of the DOA incident.

In essence, ICOs would be controlled by these securities laws unless a valid exemption could apply.


Cyprus registers Binance as a cryptocurrency service provider.

Binance, a cryptocurrency exchange, will be able to provide services for virtual currencies in Cyprus as a result of the platform's recent registration with the...

More than 24,000 ATMs in Brazil will offer USDT through Tether and Smartpay.

Usdt, the largest dollar-pegged stablecoin on the market, was created by Tether, a company. Tether recently announced that more than 24,000 ATMs in Brazil will...

To solve the blockchain modularity issue, Celestia raises $55 million.

The project Celestia, which seeks to address the alleged centralization issue in the current monolithic blockchains, has announced the completion of its most recent funding...

Hong Kong considers removing the “Professional Investor-Only Requirement” and allowing retail investors to trade cryptocurrency.

Securities and Futures Commission (SFC) of Hong Kong's director of licensing and head of the fintech division both confirmed that the regulator is taking into...

Follow us


Most Popular