The Canadian Securities Administrators (CSA) and the Investment Industry Organization of Canada have both identified predatory marketing campaigns by crypto trading platforms in Canada (IIROC).
By utilizing “gambling-style promotions” that encourage hazardous trading, crypto trading platforms may have violated existing securities laws and generated public investor anxiety.
This, according to IIROC President and CEO Andrew Kriegler, must be borne in mind by trading platforms. Kriegler argues that all marketing and advertising should adhere to standards that ensure investors are treated fairly and honestly.
Cryptocurrency marketing that is suspect
The Canadian authorities note the following instances of dubious marketing: “Your cryptocurrency assets are secure with us because we are a fully licensed Money Services Business under Canadian law.”
“Our platform has regularly been rated as the safest and most trustworthy by top rating agencies, including the Digital Bitcoin Rating Service and Triple-A Crypto All-Stars.” “Important Announcement! BTC soars to new heights! Ensure that you are not left behind!”
The first statement argues that simply registering the trading platform as a Money Services Business is sufficient to protect customer interests, disregarding any further securities law requirements.
The second statement is unsupported and hence lacks credibility. The third sentence could be interpreted as a recommendation or investment advice, both of which are prohibited for crypto asset traders.
Examining social media techniques
Social media usage is also addressed in the published compliance document, which states that when a trading platform applies for registration, the CSA may conduct an audit of the trading platform’s marketing and advertising strategies to ensure compliance. Fitness for registration may be an issue if the CSA disregards securities law and IIROC rules.
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