Canada: No more superlatives after latest guidelines on crypto-platform advertising
Investment instruments, like mutual funds, have to adhere to certain disclaimers and risk warnings while advertising. However, there are no clear guidelines for crypto-exchanges in most parts of the world. Canada is the exception now.
The Canadian Securities Administrators and Investment Industry Regulatory Organization of Canada (IIROC) is in the news today after it issued promotion guidelines for crypto-platforms.
Going forward, registered or prospective Crypto-Trading Platforms (CTPs) in Canada will be subject to certain securities’ legislation around advertising and marketing. This includes the guidelines for top bosses of the exchanges, employees, shareholders, and associated third parties.
In a statement, Ontario Securities Commissioner Grant Vingoe said,
“The biggest focus is investor protection.”
CTPs are now expected to keep records of communication with potential clients, done even via social media channels. The guidelines come on the back of the U.K watchdog urging the need to control crypto-promotions.
In fact, FCA Chief Charles Randell recently cautioned investors against taking crypto-advice from celebrities like Kim Kardashian. In an event, he was quoted saying,
“Social media influencers are routinely paid by scammers to help them pump and dump new tokens on the back of pure speculation.”
Therefore, in Canada, exchanges will have to refrain from making claims like – “Important Update! BTC skyrockets! Don’t get left behind!” or “We are your cheapest and best source for Bitcoin.”
Instead, all promotional messages will require a disclaimer regarding the inherent risk and volatility of the sector.
Vingoe added,
“The usage case for cryptocurrencies as payment systems has largely collapsed, and they’ve become speculative investments.”
What’s the story elsewhere?
Uninformed investors have for long been falling prey to crypto-scams online. Just yesterday, the Bitcoin.org website had to be taken offline after scammers began a giveaway after hacking into it.
Meanwhile, Google has also made changes to its crypto-advertising policy after a significant number of institutions recognized cryptocurrency. Since August, the tech giant has allowed wallets and exchanges to run ads in the U.S with its approval. It includes promotions on its wide reach platforms like YouTube and Google Search Engine.
On the other hand, the SEC is yet to enforce its investment promotion guidelines on cryptocurrencies and exchanges.
Even in countries like India, where crypto hasn’t gained administrative recognition, there is activity around the issue. Recently, Indian exchange CoinDCX reportedly joined hands with a self-regulatory advertising organization to build public confidence in the space.
Meanwhile, local reports confirm that an Indian court has issued a notice in response to a plea. It requests government and securities regulators to monitor advertisements of cryptocurrencies.
