OSC Grants Exemptive Relief To Token Funder Inc.

Not long after Quebec-based Impak Finance Inc. completed Canada's first legally sanctioned initial coin offering ("ICO"), the Ontario Securities Commission (the "OSC") has granted exemptive relief to Toronto-based Token Funder Inc. ("Funder") to conduct Ontario's first regulated ICO or initial token offering (an "ITO"). In particular, the OSC has granted regulatory relief to Funder which will exempt Funder from the dealer registration requirements, and allow Funder to carry out an ICO/ITO under existing prospectus exemptions. The impact of this decision is that it provides early stage companies and other high growth companies with the ability to raise capital through an ICO/ITO, which has emerged as a novel fundraising mechanism in the last year, on the basis that such an offering of coins or tokens are treated as securities. The decision also confirms the sentiments of the CSA Staff Notice 46-307 – Cryptocurrency Offerings where the CSA stated that "many" of the