The Canadian Securities Administrators (CSA) is turning its attention to warning investors about the emergence of cryptocurrency-related scams.
The heads up comes in the CSA’s annual activity report outlining its investor education and outreach efforts over the past year. The report was publish on Tuesday.
The report details the CSA’s Investor Education Committee (IEC) and its members work to educate and protect Canadian investors through a variety of national and local initiatives.
“The IEC’s primary goal is to provide a credible and objective voice to help Canadians make better-informed financial decisions,” says Louis Morisset, chairman of the CSA and president and CEO of the Autorité des marchés financiers, in a statement.
“This report provides a great inside perspective into the work our membership has put toward achieving that goal, in each and every province and territory.”
In particular, the report highlights the IEC’s work to warn investors about binary options fraud, and to push for a ban on binary options trading to retail investors, which was ultimately adopted in late 2017.
“The ban provided an even stronger warning to Canadians, precedent for other nations to consider similar measures, and opened a door for the [Binary Options Task Force] to request legitimate companies cease doing business with binary options hustlers,” the report states.
Following the ban, regulators saw a “surge” in calls complaining about possible binary options-related fraud. “As fraud often goes unreported, we attributed the increase to people feeling safe and unashamed to come forward,” the report states.
Additionally, the report details how the IEC helped the CSA’s efforts to: pressure major credit card companies to block binary options scams; push social media companies, such as Twitter and Facebook, to ban binary options advertising; combat binary options apps; and push Internet firms to remove affiliate marketing sites directed at Canadian investors.
In the wake of the campaign against binary options fraud, the CSA is increasingly turning its efforts to cryptocurrency and initial coin offering (ICO) fraud.
The IEC and the CSA task force have had “some success in influencing the decisions of major online advertisers to consider outright bans on ICO and crypto ads, due to the high percentage of Pyramid and Ponzi schemes, as well as outright theft,” the report states.