The Canadian Securities Administrators, an umbrella group for securities regulators in the country, alongside a self-regulatory organization for the investment industry, has released new guidance for crypto exchanges on the use of social media and advertising and marketing.
According to the staff document, released in conjunction between the CSA and the Investment Industry Regulatory Organization of Canada — “guides [crypto trading platforms or CTPs] on how requirements under securities legislation1 and IIROC rules relating to advertising, marketing and the use of social media may apply to them.”
The guidance covers the type of language used in advertisements.
The guidance covers the types of language used by cryptocurrency exchanges and cautions against certain formats and takes particular aim at so-called “gambling style promotions.” The financial regulator expressed concerns regarding encouraging investors to engage in excessively risky trading. “We are concerned that some of these strategies may inappropriately encourage investors to engage in excessively risky trading, taking on risks that they would normally avoid,” the notice states.
Canada tightens the environment against unregulated services.
“We wish to remind CTPs that registered dealers have an important role as gatekeepers of the integrity of the capital markets. They should not, by act or omission, engage in or facilitate conduct that brings the market into disrepute.”The new release comes as regulators in Canada tighten the environment against unregulated services. Regulators demonstrated their seriousness earlier this year when the Ontario Securities Commission kicked off an enforcement action against crypto exchange Poloniex. Later that month, Binance said it would no longer serve users in Ontario. Several countries around the world are currently working on crypto regulations in some capacity.