Lead photo by Aleksi Räisä on Unsplash

  • Canada is developing a regulatory framework for digital assets (including blockchain-based cryptocurrencies, security tokens, and tokenized IPOs / Security Token Offerings (STOs)).
  • Blockstation is proud to take a leadership role in this process, joining the recently announced Crypto Asset Working Group organized by IIROC, a Canadian self-regulatory body focused on broker-dealers, trading, and Universal Market Integrity Rules (UMIR).
  • The goal of the group is to propose a framework for digital assets that supports a robust, thriving digital asset marketplace to drive innovation while protecting investors.
  • The working group includes participation from regulators, crypto firms, law firms, and three of the largest banks in Canada.
  • Learn more about Blockstation tokenized IPOs / STOs.

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The future looks bright for digital assets and digital securities in Canada. On October 31, one of the country’s major financial regulatory bodies - the Investment Industry Regulatory Organization of Canada (IIROC) - has announced an impressive Crypto Asset Working group that will discuss and propose a regulatory framework for digital assets.

IIROC is a self-regulatory body in Canada focused on broker-dealers, trading, and Universal Market Integrity Rules (UMIR).

The announcement identified the industry leaders who have been named to the working group including three major Canadian banks, noted legal firms, securities regulators, investment services, crypto firms, and Blockstation, through its Marketing Advisor Linda Montgomery.

This is a hugely encouraging step for one of the G7 economies, bringing Canada one step closer to creating a safe and secure digital asset marketplace for investors and issuers.

Leadership in crypto assets

This working group follows a consultation paper issued jointly by IIROC and the Canadian Securities Administrators (CSA) this March, which outlined a number of regulatory issues regarding crypto assets that must be addressed.

Currently, whether and how Canadian securities laws apply to digital assets is ambiguous. CSA notices from 2017 state that securities laws may apply to assets traded on a distributed ledger (i.e., the blockchain) including Initial Coin Offerings (ICOs), cryptocurrency investment funds, and cryptocurrency exchanges. The CSA also noted that tokenized offerings such as ICOs are very similar to traditional IPOs, referencing court case that applied what in Canada is known as the Pacific Coin Test - similar to the Howey Test in the United States - which says that a coin or token counts as a security if it:

  • Involves the investment of money
  • Is a common enterprise
  • Carries the expectation of profit
  • Is significantly derived from the effort of others

(Source: Cryptocurrency in Canada, Goodmans LLP, 2018)

Blockstation is proud to leverage its expertise, having already worked with regulators in other jurisdictions in developing its fully compliant, end-to-end solution for listing, tokenizing, trading, custodianship, clearing and settlement, and lifecycle management of digital assets.

Now in final preparations to make history with digital currency (Bitcoin and Ether) trading as well as tokenized IPOs / STOs with the Jamaica Stock Exchange, named Bloomberg Businessweek’s top-performing exchange in 2015 and 2018, Blockstation is well positioned to demonstrate a safe and compliant digital securities ecosystem in action for the benefit of the financial sector in Canada and internationally.

A collaborative approach to crypto regulation

This working group is an exciting opportunity to collaborate with leading financial, legal, regulatory, and technological institutions across Canada to develop a framework that enables a robust, thriving digital asset marketplace that supports innovation while protecting investors.

For inquiries regarding the Blockstation solution for your organization, do not hesitate to contact us.