Many governments around the world growing concerned over the cryptocurrency market right now. More specifically, a lot of currencies and assets have successfully gained a lot of value this year. Canadian regulators are now ringing the alarm bell in an effort to introduce more regulation. Especially Canadian securities regulators want to introduce some changes, mainly due to the popularity of cryptocurrency ICO tokens. Not a big surprise by any means, though.
Judging by the official news, Canada may soon introduce cryptocurrency ICO regulations. That isn’t entirely surprising, as many projects sell assets which can be labeled as securities. However, they raise a lot of money without a license or without adhering to regulations. More specifically, there is no regulatory framework in Canada when it comes to cryptocurrency ICOs. The same goes for virtually every other part of the world, including the United States. Then again, the SEC is looking at introducing regulatory measures of their own in this regard.
More bad News for the Cryptocurrency ICO Sector
Moreover, the Canadian regulators acknowledge cryptocurrency markets are booming. All major currencies have seen spectacular growth throughout 2017. With the overall market cap growing from $40bn to $155bn in a few months, it is evident there is a lot of positive momentum. Whether or not we will see more growth in this market, remains to be determined. If it were up to Canadian regulators, something has to change sooner rather than later. Regulation isn’t always the answer in this regard, though. Especially with cryptocurrency itself being unable to be regulated in the first place.
The Canadian Security Administers are looking to come up with some sort of guideline in the near future. In their opinion, any coin or token valued tied to the future profits or success of a business will be labeled as a security. That doesn’t bode well for any cryptocurrency in existence, to say the least. All of their fundraising efforts revolve around people buying a coin which will be used to determine the future success of the venture. There will be some exceptions in this regard, though, but specifics still have to be worked out.
For the time being, cryptocurrencies remain a legal gray area in Canada. If regulators had taken this trend more seriously, we wouldn’t be in this situation. Then again, the regulation of ICOs is only beneficial to the ecosystem as a whole. Projects can raise funds through traditional channels as well if they want. Right now, they capitalize on the hype surrounding this business model. Investors will most likely not hold any project responsible for failure, though. If a regulatory framework is in place, teams will be forced to deliver or face the consequences. Right now, there are no repercussions for failure whatsoever.
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