CSA Provides Guidance On Securities Law Implications For Token Offerings

On June 11, 2018, the Canadian Securities Administrators (the "CSA") issued CSA Staff Notice 46-308 — Securities Law Implications for Offering of Tokens (the "Notice"). The Notice provides additional guidance on the applicability of securities laws to offerings of coins and tokens, including those commonly referred to as "utility tokens." The Notice provides examples of situations where the CSA has determined that the offering is a security and draws special attention to establishing the criteria of investment contracts. The Notice also advises businesses to consult qualified securities legal counsel about the potential application of, and possible approaches required to comply with, securities legislation.