OSC Study: Lack of understanding of cryptoassets puts Ontarians at risk
For Immediate Release OSC
TORONTO - A new research study released today by the Ontario Securities Commission (OSC) found that many Ontarians lack understanding of cryptoassets, including those who currently own cryptoassets. The study also revealed that an increasing number of Ontarians are being approached about participating in initial coin or token offerings, exposing them to potential risks given the lack of familiarity with these types of investments.
“It’s important that investors understand the potential risks and characteristics of purchasing a cryptoasset product,” said Tyler Fleming, Director of the Investor Office at the OSC. “We want to remind Ontarians to ask questions and read disclosure documents carefully to know what they are investing in.”
The Taking Caution: Financial Consumers and the Cryptoasset Sector study found that five per cent of Ontarians surveyed own cryptoassets. Ontario’s large population means that even small percentages can collectively translate into substantial numbers. Based on recent population estimates, the five per cent ownership figure translates into more than 500,000 Ontarians currently holding at least some cryptoassets.
The study also found that men aged 18-34 are more likely to own a cryptoasset than any other demographic group.
Among cryptoasset owners surveyed, half spent less than $1,000; only nine per cent reported spending more than $10,000; and the majority own Bitcoin (63 per cent) or Ether (35 per cent).
Many of those who acquired cryptoassets using a cryptoasset trading platform reported experiencing issues using these platforms, including a halt in trading (21 per cent of trading platform users), problems withdrawing money from their account (20 per cent), problems transferring money into their trading platform account (16 per cent), and not understanding the fees they are being charged (15 per cent).
The cryptoasset sector raises investor protection concerns relating to volatility, transparency, valuation, custody and liquidity. For individuals who want to learn more about the risks involved in investing in the cryptoasset sector, the OSC has published numerous resources on GetSmarterAboutMoney.ca/crypto .
The OSC’s research was conducted by Innovative Research Group and involved an online survey of 2,667 Ontarians, including an oversample of 1,506 men aged 18-34, between March 14 and 22, 2018. This group was oversampled because of its higher propensity, based on prior research, to own cryptoassets compared to the rest of the public. The results were weighted by age, gender and region using the latest Statistics Canada Census data to reflect the actual demographic composition of the adult population residing in Ontario.
The research findings are available online at InvestorOffice.ca.
The mandate of the OSC is to provide protection to investors from unfair, improper or fraudulent practices, to foster fair and efficient capital markets and confidence in the capital markets, and to contribute to the stability of the financial system and the reduction of systemic risk. Investors are urged to check the registration of any persons or company offering an investment opportunity and to review the OSC investor materials available at www.osc.ca.