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The Canadian Securities Administrators (CSA), in collaboration with the Canadian Investment Industry Organization (IIROC), published guidelines Thursday to help cryptocurrency trading platforms meet their marketing, advertising and social media compliance under securities law and IIROC rules.
The move came after regulators observed a recent increase in marketing campaigns by crypto trading platforms. This has prompted the CSA and IIROC to be concerned about the use of “game-type promotions” which may induce retail investors to engage in excessive and risky trading. President and CEO of IIROC Andrew Kriegler noted: “[C]Rypto trading platforms should consider their advertising and marketing strategies in the context of their obligations to deal fairly and honestly.
The new guidelines relate to crypto trading platforms that are already registered and those that wish to register. They also provide guidance on statements in advertising and marketing material that could be considered false or misleading. In addition, the guidelines address concerns about contests, promotions and game-type programs designed to promote risky trading by specifying that the use of such tactics may violate the good faith obligations of trading platforms under the law in force.
Additionally, the guide explains regulatory and supervisory compliance for businesses that use social media. It further clarified that as part of the trading platform registration review process, the CSA may review the advertising and marketing strategies of trading platforms.
President of ASC Louis Morisset noted: “[N]Failure to comply with the requirements of securities law and IIROC rules may raise concerns about the suitability of a crypto trading platform to register.
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