CRA-15.1.5
The guidance provided are indicative and not exhaustive and, the CBB may take into consideration additional factors while assessing an application for issuance of a
(a) Utility tokens: A utility token shall be considered a security if it has an investment purpose at the point of issue or it has the potential to become investment objects. To this end, utility tokens which are transferable shall be considered as securities.
Autility token shall not be treated as a security if its sole purpose is to confer digital access rights to an application or a service, and if the utility token can actually be used in this way at the point of issue. In such cases, the underlying function is to grant access rights and the connection and resemblance to an equity security or debt security is absent.
A
(b) Asset tokens: An asset token shall be treated as a security where it:
(i) gives rights to financial entitlement and exhibits features of either bonds or equity securities: the former if the entitlement is a predetermined cash flow; and the latter if the entitlement is a share in profit;
(ii) gives right to an entitlement in kind, and the token holder holds decision making powers in the project.
Added: April 2023