Regulators Weigh In On ICOs

Issuers contemplating initial coin offerings (ICOs) would be wise to consider the recent decision of impak Finance Inc. (Impak) by the Autorité des marchés financiers' and the Ontario Securities Commission. 

Background and Decision

Impak launched an ICO for impak Coin (MPK Tokens), which Impak describes as a cryptocurrency with a social purpose. The proceeds of the ICO are intended to fund the development of impak.eco, an online social network 100% dedicated to the "impact economy".

Prior to the launch of its ICO, Impak submitted its proposed business model to the Canadian Securities Administrators regulatory sandbox, an initiative introduced earlier this year aimed at supporting fintech businesses which intend to offer innovative products, services and applications in Canada. It is presumed that after consultation with the securities commissions in Québec, Ontario and elsewhere, Impak decided to treat MPK Tokens as securities and offer them to the public