Canadian regulators warn against 'gambling-style' marketing in crypto guidelines

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The Canadian Securities Administrators, or CSA, and the Investment Industry Regulatory Organization of Canada, or IIROC, have issued guidelines for crypto trading platforms operating in the country to avoid “misleading advertising and marketing materials.”

The Canadian regulators' guidelines, published on Thursday, caution crypto companies against advertising "gambling-style" promotions in which an investor is enticed to sign up within a specified time frame in order to take advantage of a reward or opportunity. Though the guidance on social media posts appeared to be vague, the regulators recommended that trading platforms appoint someone to review and approve communications and establish a system to ensure all messages adhere to regulatory guidelines.

“Misleading advertisements and improper marketing strategies may tempt investors to take risks they would normally avoid, and failing to adhere to securities law and IIROC rules may raise concerns about a crypto trading platform's suitability for registration,” CSA chair Louis Morisset said.

Several of the regulators' seemingly egregious examples included exchanges claiming to be registered under current securities laws or otherwise approved by regulators. The CSA and IIROC urged trading platforms to consult their legal departments before making public advertising and marketing announcements.