Canadian regulators warn crypto firms not to advertise in a way that sounds like a “lottery”

The Canadian Securities Managers (CSAs), and the Investment Industry Regulatory Organization of Canada (IIROC), They have issued guidelines for cryptocurrency trading platforms operating in the country to “avoid advertising and marketing materials that could mislead investors”.

In a post from September 23 Canadian regulatory guidelines warn crypto companies not to advertise promotions such as “lotteries” that require an investor to register within a certain period of time in order to take advantage of a reward or opportunity. Although the guide was apparently vague about restrictions on social media posting, Regulators recommended that trading platforms designate a person to review and approve communications and put in place a system to ensure that all messages comply with regulatory guidelines.

“Misleading advertising and inappropriate marketing strategies can encourage investors to take risks that they would normally avoid, and failure to comply with the requirements of the Securities Act and IIROC rules can raise concerns about the suitability of a trading platform. of cryptocurrencies for registration “, said Louis Morisset, President of CSA.

Canadian regulators warn crypto firms not to advertise in a way that sounds like a “lottery”
Canadian regulators warn crypto firms not to advertise in a way that sounds like a “lottery”

Some of the seemingly egregious examples that regulators have provided This included stock exchanges that suggest that they are registered under existing securities laws or approved by supervisory authorities. The CSA and IIROC encouraged the platforms to consult with their legal teams before launching advertising and marketing announcements to the public.

The IIROC is a self-regulatory agency that proposes measures to protect investors and support healthy national capital markets, while the CSA is a group of national regulations that cover all ten provinces and three territories of Canada.The two securities regulators have issued joint statements on the rules for actors in the crypto industry and worked together to clarify the use of cryptocurrencies with the country’s securities laws.

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