Canadian Regulator Issues Guidelines on Crypto Trading Platforms

The Canadian government has released a guideline for cryptocurrency trading platforms. The guideline addresses marketing practices, securities violations, contests reminiscent of gambling, and social media usage.

On September 23, the Canadian Securities Administrators (CSA), the country’s securities regulatory body, published a guideline for crypto trading platforms. The document covers a variety of topics, including advertising, marketing, and social media usage.

Concerns about cryptocurrency exchanges

The CSA and the Investment Industry Regulatory Organization of Canada jointly issued the notice. These organizations assert that the publication of a guideline was necessitated by “certain advertising activities and marketing strategies employed by platforms that trade crypto assets.” They are concerned that certain trading platforms and cryptocurrency exchanges may be in violation of securities laws, posing a risk to investor protection.

On a broad level, the guideline addresses potentially false or misleading advertising and marketing information, gambling-style contests, the use of social media to promote trading platforms, and general compliance with securities laws.

The notice is intended to discourage marketing that promotes compulsive trading out of fear of missing out. Regulators want to prevent rewards based on bonuses, time limits, and trading levels in gambling-style events. These types of events are popular in the market and are frequently used to grow the user base of newly launched platforms.

The CSA and IIROC have similar concerns to the US Securities and Exchange Commission (SEC). Additionally, the latter has emphasized the importance of investor protection measures. The United States is anticipated to issue regulatory recommendations in the coming months.

Investor protection and duplicitous marketing are regulators’ top priorities.

Both regulatory agencies and huge technology companies have expressed worry about the marketing and outreach of cryptocurrency platforms. The biggest concern is the proliferation of frauds, which frequently prey on inexperienced investors who have difficulty distinguishing between legal and fraudulent platforms.

These types of occurrences continue to occur, most recently with the Bitcoin.org website being hacked. The website’s attackers inserted a pop-up message on the page requesting bitcoin donations, for which they would earn double the amount. The webpage was swiftly removed.

Gary Gensler, chairman of the United States Securities and Exchange Commission, believes that thousands of cryptocurrencies that flagrantly violate rules will not survive in the long run. He’s also laid out an agenda for regulators to follow in their efforts to control the cryptocurrency business.

While the market is no longer the wild west of the 2017 ICO boom, it is nevertheless plagued by unethical business activities. Analysts and insiders feel that with regulation, the crypto market will gain greater credibility and a more sustainable road to growth.

Also Read: Twitter Updates Tips Feature To Include Bitcoin And Lightning