Ontario Securities Commission Approves Initial Token Offering

On October 17, 2017, the Ontario Securities Commission (OSC) issued its decision In the Matter of Token Funder Inc. The decision granted exemptive relief from the dealer registration requirement in order to allow Token Funder to launch an initial token offering under the offering memorandum prospectus exemption rules. The OSC decision applies in all of the provinces and territories of Canada.

Background

Over the past year, it is estimated that initial coin offerings (ICO) and initial token offerings have raised billions of dollars globally. Initial offerings are a way for blockchain startups to raise money without seeking more traditional venture financing. The majority of purchasers of tokens have purchased them solely to engage in passive investment. Others have purchased so-called "utility tokens" on the promise these tokens may be used to purchase access to development resources or platform space provided by the token issuer.