Canada securities regulators warn cryptocurrency platforms

By Legal Wires 3 Minutes Read

The Canadian Securities Administrators (CSA), in collaboration with the Investment Industry Organization of Canada (IIROC), published guidance to assist crypto trading platforms in meeting their marketing, advertising, and social media compliances under securities law and IIROC rules.

The regulators observed the surge in the marketing campaigns by the crypto trading platforms. This prompted the CSA and the IIROC to raise concerns over the use of ‘gambling-style promotions’ that may entice retail investors to engage in excessive and risky trading. The IIROC President and CEO Andrew Kriegler said: “Crypto trading platforms should consider their advertising and marketing strategies in the context of their obligations to treat fairly and honestly.”

The new guidelines are for the crypto trading platform that is already registered or are looking to get registered. The guidelines provide guidance on fake or misleading advertising and marketing materials. The guidelines also address the concerns about gambling-style contests, promotions and schemes designed to promote risky trading by specifying that using such tactics may violate the trading platforms’ good faith obligations under the existing law.

Moreover, the guidance explains the regulatory and supervisory compliances for companies that use social media. It further states that as part of the registration review process of trading platforms, the CSA may examine trading platforms’ advertising and marketing strategies.

Legal Wires

Team @LegalWires