Canadian Securities Regulators Warn Crypto Firms of Misleading Ads
The Canadian Securities Administrators (CSA) and Investment Industry Regulatory Organization of Canada (IIROC) have discovered faults with the manner in which Crypto Trading Platforms (CTPs) operating in the country advertise their products and services. As highlighted in a Thursday announcement, the CSA said it has published a set of guidelines that will prevent CTPs from violating securities laws through the inaccurate information being shared in their adverts as well as gambling-style promotional strategies.To get more news about
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“Misleading advertisements and improper marketing strategies may encourage investors to take on risks they would normally avoid, and not respecting the requirements under securities law and IIROC rules may raise concerns about a crypto trading platforms fitness for registration,” said Louis Morisset, CSA Chair and President and CEO of the Autorité des marchés financiers.
According to the published guidelines, the authorities say CTPs should desist from advertisements with information that suggests they are registered with the CSA or other relevant market regulators. Additionally, the guidelines warn that unregulated crypto platforms should avoid suggesting that their products have been endorsed by the regulators as well as withholding necessary information that will guide investors in making the right choice per time. This caution was issued to the necessary protections for investors across the board.
“Crypto trading platforms should consider their advertising and marketing strategies in the context of their obligations to treat clients fairly and honestly,” said Andrew J. Kriegler, IIROC President and CEO. “IIROC will continue to work closely with the CSA to ensure investors are protected.”
Shunning Gambling-Style Marketing
The Canadian market regulators also warned crypto firms from engaging in gambling-like marketing or promotional strategies. For example, the guidelines say “a promotion involving a bonus scheme may offer a financial reward or a bonus interest in a particular type of crypto asset for the first 500 investors who take an action within the next 24 hours.” The guideline believes these styles of adverts often push investors to take uncalculated investment risks that may backfire.
Canada is currently one of the most crypto-friendly nations. The market authorities have approved a series of crypto-backed Exchange Traded Fund (ETF) products. The nation is also a growing hub for cryptocurrency miners spilling over from China in the wake of the clampdown in the Asian region.
The latest warnings issued to the CTPs according to the regulators is to foster a fair market approach, a move that will protect investors and position services providers in the right standing with the regulators.
