Blockchain technology in Canada

The Ontario Securities Commission (OSC) is advising businesses that use distributed ledger technologies (DLT), such as blockchain, as part of their financial products or service offerings that they may be subject to Ontario securities law requirements.

"Many uses of distributed ledger technologies have the potential to increase transparency and efficiencies in our capital markets, and we are keen to support this type of innovation," said Pat Chaukos, Chief of OSC LaunchPad. "Because this is a novel area, businesses may not be aware that some uses of this technology could trigger securities law requirements. We encourage these businesses to speak with us about securities law and investor protection requirements that may apply."

Businesses are using DLT in a variety of ways. DLT may be used as the underlying technology in trading, clearing and settling securities. For example, DLT may be used to facilitate issuances of equity and debt securities and to track their ownership. DLT are core to a growing number of new virtual or digital assets. Businesses may also, for example, facilitate initial coin or token offerings where ownership of the coins or tokens is tracked using DLT, or may establish investment funds with DLT-based virtual currencies in their portfolios. Products or other assets that are tracked and traded as part of a distributed ledger may be securities, even if they do not represent shares of a company or ownership of an entity. Businesses' specific use of DLT may trigger Ontario securities law requirements, including the need to be registered or file a prospectus.