CSA/IIROC Issue Marketing And Social Media Guidance For Crypto Trading Platforms

Yesterday, CSA and IIROC Staff published Staff Notice 21-330: Guidance for Crypto-Trading Platforms: Requirements relating to Advertising, Marketing and Social Media Use. In the guidance, Staff advise crypto trading platforms (CTPs) that are registered or have applied for registration as securities dealers that they are subject to regulatory prohibitions against the use of false and misleading advertising and unsubstantiated claims.

Staff also raise concerns regarding CTPs offering their clients bonuses or rewards based on the level of trading or time-limited promotions that may encourage clients to engage in excessively frequent or risky trading. Staff remind CTPs that registered dealers are gatekeepers to the capital markets and have an obligation to treat their clients fairly, honestly and in good faith. Staff also suggest that marketing materials which encourage trading may be considered a form of solicitation and therefore trigger suitability obligations