Read This Before Your ICO: Exploring The SAFT Framework For Compliant Token Sales In Canada

Summary

To date in 2017, technology startups have raised over US$3 billion through more than 200 initial coin offerings (ICOs). As discussed in our August 30 Update, Initial Coin Offerings in Canada: The CSA Weighs In, and our September 12 Update, Cryptocurrencies: Further Legal Developments, ICOs are catching the attention of investors and securities regulators in Canada and abroad. While blockchain and cryptocurrencies carry the promise of creating new growth opportunities for startup ventures and transforming the financial services industry, undertaking an ICO can be fraught with regulatory risk. The Simple Agreement for Future Tokens (SAFT) has been developed as one way to potentially mitigate this risk by bifurcating the securities and tokens components of a transaction while preserving many of the benefits associated with ICOs.