Canada regulators warn against “gambling-style” advertising and marketing | Sept 24
The Securities Administrators of Canada or the CSA and Investment Industry Regulatory Organization of Canada (IIROC) have issued guidelines for crypto trading platforms operating in the country to avoid “promotional materials”.
In the release of 23, the Canadian regulator’s guidelines warn crypto companies against promoting “gambling-style” promotions that encourage investors to sign up for a period of time in order to take advantage of a reward or opportunity. While guidelines on restrictions on social media posts seem vague, regulators have recommended that trading platforms designate a person to review and approve communications and put in place a system to ensure that all notifications comply with regulatory guidelines.
“Misleading advertising and inappropriate marketing can encourage investors to take risks they would normally avoid, and failure to comply with securities law and IIROC rules can raise concerns about the registrability of cryptocurrency trading platforms,” said Louis Morisset, President of the CSA .
Some of the egregious examples that regulators provide are exchanges suggesting that they are registered under applicable securities laws or approved by regulators. CSA and IIROC encourage trading platforms to consult with their regulatory teams before advertising and marketing communications are released to the public.
(Canada) Related: The British advertising watchdog classifies crypto advertising as a “red alert”
The IIROC is a self-regulatory agency that recommends measures to protect investors and support healthy domestic capital markets, while the CSA is a national benchmark group spanning ten Canadian provinces and three territories. The two securities authorities previously issued joint statements on rules for players in the crypto industry and worked together to clarify the use of cryptocurrencies with the country’s securities laws.