Contained within several notices from the Canadian Securities Administrators (CSA), are clarifications of the regulations in place that can determine the legality of Initial Coin Offerings (also called Initial Token Offerings). The CSA’s main concern with ICOs in their current form will most certainly be the lack of investor protection for Canadians. Like securities laws in the United States that provide investor protection, Canada also has regulations regarding the sale of ICO tokens to its citizens.
Groundbreaking technology, spectacular returns in 2017, and a lack of cryptocurrency knowledge among the general public, is presenting a once in a lifetime opportunity for con artists. They can promise anything, deliver nothing, and collect a small fortune from unsuspecting investors. Misleading people to believe they will see spectacular returns from these activities is setting off red flags with investor protection agencies.
Approved by the B.C. Securities Commission, as well as registered in the province of Ontario, the Canadian FBC Bitcoin Trust is the first registered cryptocurrency investment fund in the country. Created by the co-founders of First Block Capital , the trust will allow for the ease of access to bitcoin investing that is badly needed within an industry that has seen many potential investors forced to sit on the sidelines. The open-end investment fund will track the market price of bitcoin, and be offered to accredited investors in a private placement offering through GMP Securities L.P. at the end of September.
Regulation is a touchy subject in the bitcoin industry. Many cryptocurrency idealists who truly believe they are invincible to government reach, also believe that the lack of bitcoin-specific regulation gives them a free pass. They may be in for a nasty surprise when they find out just how long ‘the long arm of the law’ really is. Governments around the world already have an arsenal of catch-all laws that can be used to fight tax evasion and other illegal activities that attempt to hide behind the anonymity of some cryptocurrencies and related services.
Large corporations, particularly multinationals, as well as some of the wealthiest members of society, often go to great lengths to get out of paying income tax. Their unlimited resources give them access to the best lawyers and accountants that can scour the tax code looking for any loophole that will allow them to pay less. Deep pockets and connections allow them to come up with complicated and often convoluted flow of capital plans, that sees their money move in and out of shell accounts in various tax havens around the world.
Tax avoidance and evasion by this elite segment of society has a trickle-down negative psychological effect on everyone. When an individual or small business owner who is barely getting by, sees this privileged group getting away with it, they are more likely to engage in similar illegal or immoral activities.