Canadian regulator says crypto trading is a form of DIY investing

Rick Steves

The Canadian Securities Administrators (CSA) has warned investors that trading in crypto assets is a high risk move that may not be suitable for many, especially retail investors, due to the extreme volatility in value and liquidity.

The financial watchdog reminded consumers that a number of unregistered crypto asset trading platforms remain accessible to Canadians, but these may lack essential safeguards that protect investors’ assets from loss, theft, or misuse.

“Crypto asset trading platforms that operate in Canada and trade securities or derivatives are required to comply with Canadian securities law requirements, including registering with securities regulators. While this regulatory oversight plays an important role in investor protection, investors should know that registration cannot eliminate all risks associated with crypto asset trading platforms”, the official statement said.

Trading crypto assets requires considerable time, skill and research

Calling it a form of do-it-yourself online investing, the CSA told investors that trading crypto assets requires considerable time, skill, and research, which could eventually be delegated to a registered investment advisor whose advice may point to other options for investing in crypto.

The CSA is the council of the securities regulators of Canada’s provinces and territories and coordinates and harmonizes regulation for the Canadian capital markets.

In particular, fraudsters continue to capitalize on market interest in crypto assets to lure investors into scams, using high-pressure sales tactics and promises of high returns with little or no risk.

CSA warned investors about misleading ads and crypto scams

The CSA has recently provided guidance to crypto asset players to clarify the rules for advertising, marketing, and social media use under securities law and IIRQC. The move aimed to help crypto trading platforms understand and comply with these requirements as they have noticed a recent increase in advertising and marketing by crypto trading platforms.

According to CSA and IIROC staff, there have been statements in crypto trading platforms’ advertising and marketing materials that could mislead investors. The use of gambling-style promotions, which may encourage excessive and risky trading by retail investors, is also of concern to the agencies.

The regulator also warned investors about the increasing number of imposter sites that closely resemble registered firms, regulators, and fake endorsements by individuals. These scams are often promoted through email, texts, websites and social networks. Fraudsters target investors hoping to get in “on the ground floor” with crypto assets and exploit their fear of missing out on the opportunity of a lifetime. Investors may be misled by the convincing sales pitch and the professional appearance of the fraudulent websites.

Investments on fraudulent websites will appear to gain value quickly through manipulated statements. Fraudsters will strongly encourage investors to deposit additional funds using the illusion of rapid gains. Some websites will let investors withdraw a portion of their money to build trust and entice victims to invest more, but any request to withdraw all assets will fail. Ultimately, fraudsters will no longer respond to communication requests from investors.

Read this next

Digital Assets

As SPAC bubble bursts, Circle terminates its $9 billion merger with Concord

USDC stablecoin issuer, Circle has terminated its planned $9 billion SPAC merger with publicly traded blank-check company Concord Acquisition Corp.

Institutional FX

Integral reports lowest FX volume in two years

Foreign exchange trading volumes dropped in November across Integral’s trading platforms as currency markets saw a relatively quiet period after consecutive months of strong trading activity.


CDEX: Avelacom announces connectivity to Cboe Europe Derivatives

“We anticipate that many of our customers from Asia will be particularly interested in getting exposure to pan-European products via just one venue, which CEDX offers.”

Retail FX

BUX acquires Spanish Ninety Nine’s retail brokerage unit

“Thanks to this acquisition, Ninety Nine users will have access to a wide range of services provided by BUX, such as investing in Spanish, European and US stocks, ETFs, cryptocurrencies, fractional investing and the BUX Savings Plan.”

Digital Assets

SEBA and HashKey partner to expand crypto in Hong Kong and Switzerland

SEBA Bank AG has announced a new strategic partnership with HashKey Digital Asset Group as part of both firm’s expansion efforts in Hong Kong SAR. 

Executive Moves

Broadridge appoints Martin Koopman as Chief Product Officer

“Martin has a proven record of driving product innovation both at Broadridge and at previous companies. His vision and proven ability to execute will be invaluable as we become the foremost SaaS provider to the financial services industry.”

Digital Assets

DAM rolls out Moonwalkers v1 testnet ahead of support for yield-generating collateral

“We want to champion innovation by making it easier to securely direct stablecoin liquidity away from Ethereum towards newer networks without the constant vulnerabilities posed by bridges. d20 will help accelerate the adoption flywheel of emerging networks, and this is our first step towards making our omnichain promise a reality.”

Institutional FX

FIA EXPO: ICE’s Brian Norris talks ESG investment, carbon credits and market data

The FIA Futures & Options Expo, now in its 38th year, convened the listed derivatives dealers, thought industry leaders and other stakeholders for two days of networking.

Retail FX

Malaysia regulator exposes OctaFX clone, shady FB profiles

Malaysia’s financial regulator today warned online investors about the risks of following investment tips made on social-media platforms.