North America

Favorability: 2/5


The Canadian market regulates both ICOs and cryptocurrencies, undercutting many of the founding ideas of ICOs. While it certainly will help prevent fraud and other areas of concern, it is sure to depress the overall Canadian crypto environment.

Canada is located in North America: In North America, the U.S. has had an outsize influence on the development of cryptocurrency regulation, with Canada’s smaller market now starting to catch up.


Cryptocurrency trading in Canada

Canadian regulators have said there needs to be more regulation of the cryptocurrency space, with the Canadian Securities Administers, a group of provincial regulators, delineating that a coin or token whose value is tied to the future profits or success of a business will likely be considered a security.

“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,” read their statement from 2017.

Regulation of ICOs in Canada

In August of 2017 the Canadian Securities Administrators (CSA) released notice 46-307 to initial coin offerings (ICOs), which impacts:

  • ICO’s everywhere in the world with Canadian buyers
  • Exchanges that trade ICO coins to Canadian customers
  • Companies in Canada that are conducting an ICO

There are four requirements to consider whether the ICO is a security, the same as those in the US. All the following must be met:

  • An investment of money (including virtual currency)
  • In a common enterprise
  • With the expectation of profit
  • Work to come significantly from the efforts of others

They also laid out more detailed requirements, such as the need for a prospectus, which undercuts many ICOs and the exemptions from these apply if you go to formal investors, the very ideal ICOs set out to circumvent. Cryptocurrency exchanges are also regulated.

Cryptocurrency markets in Canada

Prague has over 80 locations that accept payment with cryptocurrency.

The cryptocurrency markets in Canada have lagged behind the US and with the adoption of heavier regulations it is yet to be seen whether a robust community can develop.

IBC’s planning and strategy team can provide expert advice on ICOs in different jurisdictions. If you’re thinking of holding an ICO in COUNTRY and you’d like more information, contact us here.

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