Administrators of Canadian Securities (CSA) and the Canadian Investment Regulatory Organization (IIROC) recently issued a notice to employees addressing and focusing on improper marketing practices of cryptocurrency trading platforms (CTPs) in the country, and providing clarification on the rules to be observed

Regulating Crypto Ads:

A notice was issued to organizers earlier this week on OSC-eExpressing concerns about certain advertising activities and marketing strategies through platforms that trade crypto-assets, stressing that these practices could violate the requirements of securities legislation, and raise public interest concerns.

As for the cryptocurrency exchanges in question, it has not been named.

While the regulators raised some concerns about gambling promotions, the warning text read:

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We have recently noticed that some cash transfer programs use advertising or marketing strategies that include contests, promotions, rewards and time limits to encourage investors to engage in trading and act quickly for fear of missing out on an investment opportunity or reward.

The CSA and IIROC are of the view that such promotions can encourage investors to make riskier investment decisions than they normally would in a time-insensitive environment.

Consequently, such activity may violate the Registrant’s obligation to treat customers fairly, honestly and in good faith.

Examples of suspicious ads that Canadian financial regulators have warned about include:

We are the cheapest and best source of bitcoin.

Regulation of the crypto market in Canada:

Although it may seem completely unclear, the recently published document notably shows the intent of Canadian regulators to bring about the changes they would like to see from cryptocurrency exchanges in the country.

It even provides a list of CSA and IIROC employees that remittance programs can contact with further questions.

This is in contrast to the US, where it is still difficult for trading platforms to obtain regulatory clarity.

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Similarly, the Securities and Exchange Commission (SEC) has been slow compared to Canada in implementing and approving a Bitcoin ETF, even though Chairman Gensler has expressed his openness to the Bitcoin futures ETF.

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