From the Regulators

Regulator uses social media platform to set out its approach to fintech and ICOs

By James Langton |

 

The Ontario Securities Commission (OSC) is using Twitter to defend its approach to initial coin offerings (ICOs).

In a move that highlights the rapid evolution of the financial services sector and industry regulation, Canada's largest securities regulator tweeted a statement today that details its approach to regulating the emerging world of cryptocurrency offerings, also known as ICOs.

Recently, the founder and CEO of messaging app Kik Interactive Inc. criticized the regulators in a blog post, saying that his firm wasn't getting adequate guidance about how securities law would apply to its planned ICO.

Now, the OSC is responding in the tech world's native tongue — Twitter — with an extensive tweet that sets out its approach to fintech innovation generally, and the emerging world of cryptocurrency offerings in particular.

In its statement, the OSC notes that the Canadian Securities Administrators (CSA) published guidance in this area earlier this year. The Ontario regulator stresses that the approach being taken by the CSA is similar to the stances of other regulators, such as the U.S. Securities and Exchange Commission and the U.K.'s Financial Conduct Authority.

"Cryptocurrency offerings have the potential to change the way financial services are offered to Canadians, and we're keen to support innovation in this area," the OSC says in its statement. "At the same time, we must balance the demand for new ways to raise capital and invest, with the need to protect investors from high-risk or fraudulent activities."

The OSC recommends that companies that are contemplating an ICO contact its fintech team, OSC LaunchPad, as early as possible to determine whether securities law may apply to their proposed deal.

"We are willing to sit down with any business that has questions about this area and regularly host information days for the fintech community on topics such as cryptocurrency offerings," it states.

Additionally, the OSC reports that it has established a team of executives to "respond quickly" to proposed ICOs.

"We aim to be flexible in our approach," the OSC states, "and believe it's important to work together with businesses and investors to find the right balance for those vested in this space."

 

 

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