Author: Michael Bacina - Partner, Piper Alderman

So what’s new?

1. Many ICOs are managed investment schemes

ASIC has emphasised that ICOs and cryptocurrency may be financial products in its recent update to information sheet 225 (INFO225). On 3 May 2018, ASIC updated its INFO225 which provides a timely reminder that ICOs may be managed investment schemes that require disclosure documents under the Corporations Act 2001 (Cth). The definition of “managed investment scheme” is quite broad in Australia and any rights described in the whitepaper that may arise in the future or on a contingency will be considered by ASIC when determining if an ICO is a managed investment scheme, shares, derivative or non-cash payment facility.

In early May, Australian betting platform Neds discontinued their ICO after the Australian Newspaper reported that ASIC considered Neds to be offering securities without complying with Chapter 6D of the Corporations Act and their whitepaper was potentially misleading and deceptive. Neds was looking to raise over $55 million in an ICO and promised that NedsCoin holders would receive a percentage of revenue each year. Clearly the features of this token indicated that the ICO was an offer of securities.

Read more: Top 5 must know ICO regulatory updates in Australia

On 12th October Gibraltar became the first jurisdiction to introduce laws to regulate firms carrying on business, from Gibraltar, using Distributed Ledger Technology (“DLT”). Limited regulation of certain DLT use cases exists in a handful of places but no other country has introduced the comprehensive regulatory framework we have set up in Gibraltar. The laws come into effect on 1st January 2018.

The Gibraltar Government and our regulator, the Gibraltar Financial Services Commission (“GFSC”), recognise that DLT is delivering innovative and transformational changes in the way the world conducts business. Those familiar with DLT will know that without the blockchain, a type of distributed ledger, Bitcoin and other crypto currencies could never exist. Gibraltar has moved quickly to embrace this technology and provide the framework for a well-regulated and safe environment for DLT business to flourish.

Read the entire article. 

Contact: Matt Burgoyne; McLeod Law (Alberta, Canada)

Matt Burgoyne is an associate at Canadian legal firm McLeod Law. He is involved with Canadian and international counsel in the developing area of virtual currency law, specifically including bitcoin currency.

One of the most frustrating things I encounter when being retained by a new client or working with an existing client operating in the bitcoin space is that without exception, I have the unfortunate task of advising them that as it stands now in Canada, the chances of them obtaining a regular commercial services based bank account are 0%.

Read more: Bitcoin Businesses and Canadian Banks: The 'Catch 22' Dilemma

My name is Matt Burgoyne and I’m an associate at Canadian legal firm McLeod Law (Alberta, Canada). I’m involved with Canadian and international counsel in the developing area of virtual currency law, specifically including bitcoin currency. In this two-part series, I will give a basic primer on the state of Canadian law as it applies to digital currency entrepreneurs.

In the first article I published on Canadian bitcoin law we discussed legislation as it applies at the federal level, where I made the comment that it is at the federal level where most of the ‘action’ lies in respect to Canadian law as it pertains to bitcoin businesses.

Read the entire article.