Financial regulators in Canada are giving the digital currencies and initial coin offering (ICO) activities a big break. Among the regulators is Quebec’s Autorite des Marches Financiers (AMF), which intends to give the Blockchain use case a chance, if not altogether encourage it.
To show its support to ICOs, the AMF has determined that the token sale conducted by socially responsible enterprises investment startup Impak Finance is a security. The regulator also accepted the company into its regulatory sandbox.
The AMF has also relieved Impak Finance some of the requirements that it usually required from securities for protection purposes so that the ICO will materialize.
According to AMF corporate finance division director Patrick Theoret, the move is a test case to determine whether there will be investor protection issues that will emerge from the ICO:
"It’s in the spirit of the sandbox that we are willing to alleviate some of the requirements on, sort of, a test case basis. It's a test run to see whether there are investor protection [issues] with the relief that we grant."
Efforts by the Canadian government to support financial technologies
In its bid to support fintech projects in Canada, the consortium of provincial securities regulators called the Canadian Securities Administration to launch the regulatory sandbox so that the projects that are not covered by a legacy framework can materialize.
An ICO, which is an emerging fundraising mechanism by which new virtual currencies are created and sold to investors, fits in the regulatory sandbox.
According to Impak Finance president Paul Allard, they decided to participate in the sandbox due to their belief that the regulators are really interested in supporting the digital currency sector:
"I had been working with the regulators for several years prior to Impak Coin, and I knew that they were keen in adapting their regulatory framework to catch up with the cryptocurrency sector.”
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