AMF v. Gagnon: What a Québec Tribunal Decision Signals for Crypto Regulation in Canada

On September 15, 2025, Québec’s Financial Markets Administrative Tribunal (the Tribunal) released its decision in Autorité des marchés financiers v. Gagnon. The ruling has drawn attention from legal practitioners, regulators, and market participants for the guidance it provides on how existing securities laws apply to crypto asset activity in Canada.

Drawing on analysis from leading Canadian law firms, this blog post outlines what the Gagnon decision means in practice for market participants, which activities remain clearly subject to securities regulation, and why the case has renewed calls for greater legislative clarity in Canada’s digital asset framework.

Implications for Canada’s Digital Asset Ecosystem

For participants across Canada’s Web3 and digital asset sector, legal analyses of the AMF v Gagnon decision point to several practical implications:

• Crypto assets are not presumptively securities; classification depends on the specific economic reality of a transaction.
• Activities traditionally regulated under securities law, such as discretionary investment management or advising, remain subject to compliance requirements, regardless of asset type.
• Enforcement alone has limits when applied to novel technologies, reinforcing the need for clear, purpose-built legislation.
  
  

Importantly, the decision does not remove regulatory uncertainty for market participants. The AMF has appealed the ruling, and regulators retain authority to pursue matters involving prospectus and registration requirements where the statutory thresholds are met. Market participants should continue to engage prudently with existing regulatory expectations while monitoring developments closely.

Background: What Was at Issue in AMF v. Gagnon

At its core, this case is about whether digital assets are securities. The case arose from an enforcement action brought by Québec’s securities regulator, the Autorité des marchés financiers (AMF), against Alexandre Gagnon and his company, known as “Richie the Bull.” The respondents offered two primary services related to crypto assets: discretionary management of client crypto portfolios on decentralized exchanges, and paid subscription-based social media groups providing commentary and buy-and-sell signals for various crypto assets.

The AMF alleged that Gagnon’s activities constituted the distribution of securities without a prospectus, advising in securities without registration, and market manipulation under Québec’s Securities Act. Central to the AMF’s case was the position that the crypto assets involved, and the services built around them, qualified as “investment contracts,” and therefore securities subject to Québec’s securities framework.

How the Tribunal Interpreted “Investment Contracts”

The Tribunal adopted a transaction-specific approach to interpreting “investment contracts” under Québec’s Securities Act, according to commentary from Canadian law firms (See Reference 1 and 2).

Analyses from McCarthy Tétrault and McMillan state that the Tribunal declined to treat crypto assets as securities by default or to rely on an asset-based classification. Instead, it focused on the economic reality of the specific transactions at issue, assessing whether they involved a contribution of capital to a common enterprise with a reasonable expectation of profit derived primarily from the efforts of others. McCarthy Tétrault and McMillan noted that this approach aligns with long-standing Canadian securities law principles and avoids extending regulatory scope solely on the basis of technological form.

Spiegel Ryan, a Canadian law firm, emphasized the Tribunal’s focus on transactional context, noting that the legal characterization of a crypto asset was not determinative on its own. Instead, the Tribunal assessed the surrounding facts and circumstances of each transaction, meaning the same crypto asset may be treated differently depending on how and by whom it is distributed or traded.

The Tribunal cited recent U.S. case law, notably adopting a similar distinction to the court in  SEC v. Ripple Labs. As noted by McCarthy Tétrault and McMillan, the Tribunal determined a distinction between primary distributions by promoters, which may give rise to investment contracts, and secondary market trading among independent parties. On this basis, the Tribunal concluded that secondary market trading of crypto assets on decentralized exchanges does not automatically involve an investment contract, absent circumstances that meet the statutory test.

With respect to paid subscription-based “finfluencer” services, legal analyses, particularly from Spiegel Ryan, observed that the Tribunal rejected the AMF’s position that these arrangements constituted investment contracts. The Tribunal found that subscribers retained full discretion over whether to follow trading signals, were not participating in a common enterprise, and were not shown to lack sophistication. Spiegel Ryan emphasized that, on the Tribunal’s reasoning, subscription-based commentary and trading signal groups did not meet the requirements of an investment contract under Québec’s Securities Act.

Enforcement Remains Where Regulated Activity Exists

While the Tribunal narrowed the circumstances in which crypto assets themselves may be treated as securities, it did not weaken the enforceability of existing securities law where traditionally regulated activities are clearly engaged, noted legal analyses from McCarthy Tétrault and McMillan. Both firms added that the Tribunal upheld findings of non-compliance relating to unregistered advising and investment management. Where individuals exercised discretionary control over client assets or engaged in activities analogous to portfolio management, those activities were found to fall squarely within the scope of securities regulation, regardless of whether the underlying assets were crypto-based.

For market participants, commentators underscored an important distinction: the legal characterization of a crypto asset does not displace long-standing compliance obligations associated with advising, managing, or distributing investments.

A Caution Against Regulation by Enforcement

Legal commentators highlighted the Tribunal’s clear reluctance to extend regulatory authority through enforcement absent explicit legislative direction. In their analyses, they pointed to the Tribunal’s repeated emphasis on the limits of existing statutory definitions and its caution against interpretations that could inadvertently constrain innovation in a rapidly evolving sector.

Commentators noted that the Tribunal’s refusal to characterize secondary market crypto trading or alleged “pump and dump” activity as securities law violations, absent proof that the assets themselves were investment contracts, signals an expectation that material expansions of regulatory scope should come from legislatures rather than enforcement actions.

McMillan also situated the decision within a broader international context, noting that U.S. policymakers have begun moving away from enforcement-led approaches toward clearer market-structure legislation, and observing that the Tribunal’s reasoning reflects concern about the risks associated with regulatory uncertainty.

Looking Ahead

AMF v. Gagnon represents an important moment in Canadian digital asset jurisprudence. It clarifies the current boundaries of securities law, affirms the relevance of economic reality analysis, and highlights tension between innovation and legacy regulatory frameworks.

More broadly, the decision underscores the importance of legislative action to provide clarity, consistency, and predictability for consumers and innovators alike. As digital asset activity continues to intersect with payments, capital markets, and financial infrastructure, a transparent and tailored policy framework will be essential to supporting responsible growth in Canada’s digital economy.

The Canadian Web3 Council will continue to monitor legal and regulatory developments closely and engage with policymakers, regulators, and industry stakeholders to advance a balanced approach that protects consumers while enabling innovation to flourish in Canada.