The Canadian Securities Administrators, an umbrella group for regulators from each of the 10 provinces and 3 territories in Canada, has released new guidelines on the use of social media, advertising, and marketing by crypto exchanges.
The staff document was released in tandem with the Investment Industry Regulatory Organization of Canada. It "provides guidance for [crypto trading platforms or CTPs] on how requirements under securities legislation1 and IIROC rules relating to advertising, marketing and the use of social media may apply to them."
The notice takes a jab at the kind of advertising language used by crypto exchanges, with particular emphasis on so-called gambling style promotions. It states:
We are concerned that some of these strategies may inappropriately encourage investors to engage in excessively risky trading, taking on risks that they would normally avoid […] we wish to remind CTPs that registered dealers have an important role as gatekeepers of the integrity of the capital markets. They should not, by act or omission, engage in or facilitate conduct that brings the market into disrepute.
The new release follows Canada’s enforced rules against unregulated services. Regulators in the country showed their zeal when Ontario Securities Commission kicked off an enforcement action against crypto exchange Poloniex. Binance announced that it would no longer serve users in Ontario later that month.