Canadian market regulators, including the Canadian Securities Administrators (CSA) and Investment Industry Regulatory Organization of Canada (IIROC) have issued warnings to cryptocurrency service providers who mislead investors through their gambling style advertisements.
In a Thursday publication, the market regulators said a detailed guideline has been released to help all concerned stakeholders market to sell their products and services under the Canadian securities allowance.
The market watchdogs said crypto trading platforms are fond of marketing their products with misleading information which suggests they are registered with the appropriate authorities. Louis Morisset, CSA Chair and President and CEO of the Autorité des marchés financiers, said:
“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,”
Additionally, a lot of crypto trading platforms are accused of using a gambling-style approach to attract customers. For example, the published rules say crypto outfits often roll out their advertisements in a way that spells time urgency for a defined number of people. In clearer terms, the regulators pointed out that “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 essence of the prompting was for market participants to engage in a fair manner such that all investors are duly protected.
“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.”
Canadian market authorities have been bullish on digital currency innovations in recent times, with the country’s apex bank also making developmental moves for its Central Bank Digital Currency (CBDC).
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