Ontario Securities Regulator Issues Warning About ICO And Regulatory Implications
The Ontario Securities Commission (OSC) plans to place more focus particularly on regulations regarding cryptocurrencies and ICOs over the next one year. The regulatory watchdog recently released a publication in which it pointed out that the cryptocurrency market and token sale are two of the major areas in which it would work towards gaining more knowledge. The statement also highlighted plans to institute regulations on the two areas in the near future.
The Ontario regulator also stated that it was open to feedback about the issue until May. Despite announcing plans to implement regulations, the commission acknowledged that cryptocurrencies are an innovative force within the financial sector. However, it warned that there are various market risks that are associated with cryptocurrencies and ICOs.
In its statement, the OSC pointed out that the innovation involved blockchain and cryptocurrencies has been causing more complexities within the financial markets. This complexity puts consumers at risk because they do not understand what they are purchasing. The statement added that cryptocurrency ICOs and other similar instruments can bring about fundamental issues relating to the scope of regulation and that they also raise numerous investor protection issues.
Despite issuing the warning, the Ontario regulator views the lack of proper regulations for the cryptocurrency market as an opportunity to react and make changes in a timely manner without disrupting the markets or affecting investors negatively. The OSC also described Ontario as a fintech innovation hub, thus the need to work on accommodative regulation a part of remaining open-minded to new technologies.
The OSC made a previous announcement on 8th March warning companies and individuals about the dangers associated with investing in ICOs. The regulator stated that ICOs may trigger the need for registration under Ontario Securities laws. The regulatory watchdog plans to hold talks and work hand in hand with cryptocurrency exchanges as well as other stakeholders to streamline the developments in the digital currency industry.
Canada does not handle securities regulation like any other country where national regulators are involved. Instead, the North American country allows securities regulation to be handled at the provincial level. This means decision making can happen at a faster rate since there is less bureaucracy. This has worked well in the case of Quebec’s securities regulator which is currently considered one of the best in Canada’s cryptocurrency market.