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ARTICLE · 23 DECEMBER 2020

Initial Coin And Token Offerings May Engage Securities Laws

Miller Thomson
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With the rise in popularity of cryptocurrency, many small fintech businesses have begun developing their own coins and tokens. This has led to a rise in Initial Coin Offerings ("ICOs") and...

CanadaCorporate/Commercial Law
Nathanial Day
Nathanial Day
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With the rise in popularity of cryptocurrency, many small fintech businesses have begun developing their own coins and tokens. This has led to a rise in Initial Coin Offerings ("ICOs") and Initial Token Offerings ("ITOs") as a means to raise investor funds to develop the coins/tokens. ICOs/ITOs can trigger registration and prospectus requirements under securities laws, and as such fintech companies should first consider applicable securities legislation.

ICOs/ITOs may involve securities

Each province in Canada has its own securities legislation, which has led to some differences in how a "security" is defined depending on the jurisdiction. However, securities legislation in every province includes "investment contracts" within their definition of a "security."1

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