British Columbia Securities Commission Issues ICO Warning

On May 17, 2018, the British Columbia Securities Commission ("BCSC") issued an investor alert warning residents of the province to exercise "extreme caution" when considering whether to invest in cryptocurrency offerings and in particular, initial coin offerings ("ICOs)" and initial token offerings ("ITOs").

Issued in response to a noted increase in the number of ICOs and ITOs, the BCSC alert warns that while some companies follow through on their promised business plans or ideas, some do not, and that some companies use ICOs and ITOs purely for speculative trading in the secondary market, an activity the BCSC brands as "inherently risky".

ICOs and ITOs are issuances of cryptocurrency coins or tokens, often to raise capital or fund projects, but also used for other purposes, such as to represent units of utility or rights. As the BCSC alert notes, many of these coins and tokens are securities, and if so, they—and the ICOs and ITOs through which they are issued—are