The Canadian Securities Administrators (CSA) and Investment Industry Regulatory Organization of Canada (IIROC) have published an outline explaining h0ow crypto exchanges may advertise and promote their services.
The CSA is the national entity that works with all provincial regulators seeking to provide a harmonized approach to policy and securities regulation. The CSA states that securities regulators have noticed a recent increase in advertising and marketing by crypto trading platforms.
The CSA and IIROC staff reportedly have observed statements in crypto trading platforms’ advertising and marketing materials that could mislead investors.
The CSA adds that staff are also concerned about crypto trading platforms’ use of gambling-style promotions that may encourage risky trading by retail investors.
Louis Morisset, CSA Chair and President and CEO of the Autorité des marchés financiers (Quebec), stated:
“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 platform’s fitness for registration.”
The guidance is intended for registered crypto trading platforms and platforms that have or will be applying for registration and other registrants that may be considering establishing a platform as a new business line.
The CSA states that crypto trading platforms should consult with their legal counsel and contact their local securities regulatory authority on appropriate steps to comply with promotion as well as the use of social media.
“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.”
