The Ontario Securities Commission (OSC) announced today it is investigating several cryptocurrency platforms after receiving a number of complaints.
The OSC said that the platforms and any businesses that allow cryptocurrencies that are securities as defined under CSA Staff Notice 46-307 Cryptocurrency Offerings (the Staff Notice), to trade on them, may be operating outside securities law.
The OSC warns that any cryptocurrency-based trading platform must define themselves as marketplaces and follow the same rules as other marketplace exchanges. The OSC also notes that no platforms to-date have been recognized as an exchange or have exempted from recognition.
This action by the OSC comes after the recent launch of a numerous ITOs (Initial Token Offerings) and ICOs (Initial Coin Offerings), which may be used by companies as an alternative way to raise funds. With little regulation, however, ITOs/ICOs have also raised worries about possible financial scams.
For more information, please call Barbara Hendrickson at BAX Securities Law (416) 601 -1004.
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