Global FinTech Guide
Country Name
ICO / token sale
Companies and projects have increasingly relied on the sale of digital assets, or tokens, as a means of fundraising. These tokens generally do not grant the holders an ownership interest in the issuing company or project, but may provide governance rights, access rights or other utility. This has been conducted through public sales known as initial coin offerings (ICOs), proliferation through token generation events (TGEs) or private sales, among other mechanisms.  While showing characteristics of traditional methods of fundraising, there are a range of unanswered questions related to the legal classifications of such products. As ICOs and TGEs will usually be distributed online and internationally, there is usually no single legal framework applying to such transaction, and the legal framework of each market in which the tokens may be offered or sold needs to be considered.


Attitude of the country towards ICOs/token sales

ICOs were popular several years ago; however, there are not many new ICOs being listed. The social climate is positive while the political climate lags behind.

Legal affairs

Presence of any explicit regulation on ICOs and the issuance of token/coins


Presence of any explicit restrictions on ICOs or the issuance, distribution and/or transfer of token/coins

There are many restrictions to issue and distribute ICOs. Initial assessment is whether the ICO is a utility-type token (minimal regulations) or a security token (numerous regulations). Getting the utility token distributed and the related regulations depends on the market exchange requested. Transfer of token/coins B2B or B2C can be readily implemented.

Obligations and requirements to issue token/coins

If the token/coin is a utility token, there may be some provincial regulations. This depends on the purpose of the utility token (for example, for an agricultural Native Asset token, there could be provincial agricultural regulations). If a security token is offered, as above, numerous and expense regulations are to be complied with. The most cost-effective way to issue a security token is via a prospectus or offering memorandum. Typical security regulations relate to security token issuance.

Classification of token/coins in the jurisdiction

It is a question of fact whether the token/coin is a currency/payment instrument or security or investment product. Each province has similar definitions for what a security or investment product is. Once the purpose of the token/coin is clearly understood, then applicable regulations, if any, can be analysed.

Presence of a duty to publish a prospectus bevor offering token/coins to investors

Yes, if the token/coin is within the provincial definition of a security.

Presence of AML/KYC requirements that are needed to be fulfilled regarding (i) the initial issuance of token/coins and (ii) any following transfer of token/coins to third parties

Typically, AML/KYC requirements are to be fulfilled for those acquiring the token/coin. The transfer of token/coins is somewhat regulated and depends on if the transfer is via market exchange to market exchange or OTC.

Additional comments regarding (i) the legal situation for ICOs/token/coins and (ii) any following transfer of token/coins to third parties


Economic conditions

Market size for ICOs/token sales and existence of any previous regulated ICO/token sales in the jurisdiction

Market size for ICO/Token sales is in the billions of dollars daily. Regulated ICO/token sales take place every day in Canada.

Additional comments regarding the economic situation for ICOs/token sales or what companies must be aware of in this business area




© 2022, Miller Thomson LLP; Shibley Righton LLP. All rights reserved by Miller Thomson LLP; Shibley Righton LLP as author and the owner of the copyright in this chapter. Miller Thomson LLP; Shibley Righton LLP has granted to Multilaw non-exclusive worldwide license to use and include this chapter in this guide and to sublicense Lexis Nexis, a division of RELX Inc. and its affiliates certain rights to use and distribute this guide.

The information in this guide provides a general overview at the time of publication and is not intended to be a comprehensive review of all legal developments nor should it be taken as opinion or legal advice on the matters covered. It is for general information purposes only and readers should take legal advice from a Multilaw member firm.


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