The Canadian regulator says cryptocurrency trading is a form of self-investment

The Canadian regulator says cryptocurrency trading is a form of self-investment

The Canadian Securities Administrators (CSA) have 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 high volatility in value and liquidity.

The FCA reminded consumers that a number of unregistered crypto-asset trading platforms are still available to Canadians, but may lack the basic safeguards protecting investors’ assets from loss, theft or misuse.

“Crypto-asset trading platforms operating in Canada and trading securities or derivatives are required to comply with requirements of the Canadian Securities Act, including registration with securities regulators. While such regulatory oversight plays an important role in investor protection, investors should know that registration It cannot eliminate all the risks associated with crypto asset trading platforms.

Trading crypto assets requires significant time, skill and research

Describing it as an online form of investing, the CSA tells investors that trading crypto assets requires significant time, skill, and research, which can ultimately be delegated to a registered investment advisor whose advice may point to other crypto investment options.

CSA is the Council of Canadian Provincial and Territorial Securities Regulators and coordinates and harmonizes regulation of Canadian capital markets.

In particular, scammers continue to take advantage of market interest in crypto assets to lure investors into scams, using high-pressure selling tactics and promises of high returns with little or no risk.

The Canadian Space Agency has warned investors about misleading advertisements and cryptocurrency scams

The CSA recently provided guidance to players in crypto assets to clarify rules for advertising, marketing, and social media use under the securities law and IIRQC. The move is intended to help cryptocurrency exchanges understand and comply with these requirements as they have noted a recent increase in advertising and marketing through cryptocurrency exchanges.

According to CSA and IIROC staff, there were statements in advertising and marketing materials for cryptocurrency exchanges that could mislead investors. The use of gambling-style promotions, which may encourage excessive and risky trading by retail investors, is a concern for the agencies.

The regulator also warned investors about the growing number of fraudulent websites that look very much like registered companies, regulators, and fake endorsements by individuals. These scams are often promoted through email, text, websites and social networks. Scammers target investors hoping to get “ground floor” with crypto assets and exploit their fear of missing out on the opportunity of a lifetime. Investors may be misled by the persuasive selling proposition and professional appearance of fraudulent websites.

Investments in fraudulent websites seem to quickly gain value with manipulated data. Scammers will aggressively encourage investors to deposit additional funds using the illusion of quick wins. Some websites will allow investors to withdraw part of their funds to build confidence and entice victims to invest more, but any request to withdraw all assets will fail. Ultimately, scammers will not respond to requests for communication from investors.

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