In a white paper that CPA Ontario published today, the institution advised accountants within Ontario to proceed with caution when interacting with the nascent digital currency industry and avoid unregulated ICOs.
Recommending CPAs steer clear of “non-security tokens”
As a regulatory body and professional organization for the province’s chartered accountants, CPA Ontario is a significant player in Canada’s financial ecosystem.
While it calls itself a strong advocate of financial innovation and praises the potential of Initial Coin Offerings (ICOs), it acknowledges the challenges and risks presented by their meteoric rise.
“After an in-depth review of the growing ICO marketplace and cryptocurrency space, CPA Ontario identified significant risk, specifically with the ICO market which is highly speculative and susceptible to fraud and market manipulation,” it stated, in an accompanying press release. “Until regulation has caught up to innovation, CPA Ontario is recommending that CPAs in the province refrain from any work on the issuance of ‘non-security tokens.’”
CPA Ontario’s warning reflects the currently unclear status of digital currency regulation. Previously, the Ontario Securities Commission (OSC) announced that it will make innovative digital currency regulation a key focus in the 2018-2019 financial year.
In the meantime, CPA Ontario is hesitant on promoting engagement with ICOs that operate outside of currently defined regulation.
“A sustainable ICO market could support Ontario’s growing innovation economy,” said Carol Wilding, president and CEO of CPA Ontario. “But our members are facing increasing demands to navigate this new marketplace without clear, transparent regulation. While this paper offers some guidance, we are advocating for smart – not onerous – regulation that continues to support innovation while protecting the public interest.”
Acting with objectivity and professional skepticism
Overall, CPA Ontario advises chartered accountants to proceed with caution and professional skepticism when interacting with the digital currency industry.
In the white paper titled Navigating the Brave New World of Cryptocurrency and ICOs, CPA Ontario outlines the role accountants play in the world of business. This role, it explains, includes unforeseen challenges presented by the at-times unpredictable nature of the digital currency industry.
CPA Ontario calls on ICOs and regulatory bodies to work together to create clearly defined regulation that will allow innovative blockchain technology projects to flourish in Canada.
Its white paper on navigating ICOs in Ontario marks the launch of a thought leadership series that CPA Ontario intends to release. Reportedly, this series will focus on emerging issues within the province.
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