CANADA Law and Practice Contributed by: Martha Harrison, Nikiforos Latrou, Eugenia (Evie) Bouras and Marissa Caldwell, McCarthy Tétrault
If a crypto-asset qualifies as a security or derivative, its distribution and promotion must comply with secu - rities legislation, including registration, disclosure and conduct obligations. The Canadian Securities Admin - istrators, in collaboration with the Investment Industry Regulatory Organization of Canada, has issued Staff Notice 21-330, which provides detailed guidance for crypto-trading platforms on advertising, market - ing and social media use. This includes prohibitions against misleading statements – such as suggesting that a platform is registered when it is not, or imply - ing regulatory approval of products or services – and cautions against gambling-style promotions that may encourage excessive trading. Even where crypto- assets do not meet the definition of a security, adver - tisers must still comply with the misleading advertising provisions of the federal Competition Act. In Québec, platforms facilitating the sale of cryptocur - rency may be required to register with the Autorité des marchés financiers and meet additional disclosure obligations. Given the evolving nature of crypto regu - lation, advertisers should exercise caution and ensure that their promotional practices align with both securi - ties and consumer protection frameworks. 9.2 Metaverse Although Canada currently lacks legislation tailored specifically to metaverse advertising, existing regula - tory frameworks – such as the Competition Act and the Canadian Code of Advertising Standards – may govern advertising activities conducted within virtual environments. Should Canadian consumers be tar - geted by a company’s advertisements, it is likely that Canadian advertising laws would be applicable. Advertisers must ensure that claims made in the metaverse are not false or misleading and that the overall “general impression” of the advertisement is truthful and substantiated. This includes considering how consumers experience and interpret advertising in immersive environments, where visual, auditory and interactive elements may influence perception. Additionally, advertisers must comply with the terms and conditions of the metaverse platforms they use, which often include platform-specific rules govern - ing promotional content, user targeting and brand
representation. As brands increasingly engage with consumers through virtual goods, NFTs and brand - ed experiences in the metaverse, they must also be mindful of trade mark enforcement challenges, includ - ing the risk of virtual counterfeiting and the difficulty of identifying infringers in decentralised environments. Canadian advertising laws remain applicable and enforceable wherever Canadian consumers are tar - geted.
10. Product Compliance 10.1 Regulated Products Alcohol
Advertising for alcohol is regulated at both the fed - eral and provincial levels in Canada. Federally, rules apply when alcohol advertisements are broadcast via TV or radio, governed by the Code for Broadcast Advertising of Alcoholic Beverages (the “Broadcast - ing Code”), which is administered by the Canadian Radio-television and Telecommunications Commis - sion (CRTC). The Broadcasting Code prohibits depic - tions that appeal to minors or suggest that alcohol consumption leads to financial or social success, athletic prowess or goal fulfilment. It also bans the visual or audible portrayal of alcohol consumption. All broadcast alcohol ads must be pre-cleared by Ad Standards. Provincially, each jurisdiction has its own legislation governing alcohol promotion, apply - ing to liquor licence holders, suppliers, manufactur - ers and anyone advertising alcohol – regardless of media format. Certain provinces apply the provisions of the Broadcasting Code to all alcohol advertising regardless of the media, and others impose a social responsibility statement in all alcohol ads. While rules vary slightly, most provinces prohibit advertising that targets minors, implies social or financial gain, or glo - rifies the effects of alcohol consumption. Lastly, in some provinces, such as Québec and Nova Scotia, alcohol advertisements must be pre-approved by the provincial liquor regulator before publication. Tobacco and Vaping Tobacco and related products – including vapes and nicotine pouches – are similarly regulated at both the provincial and federal levels. Federally, the Tobacco and Vaping Products Act, enforced by Health Canada,
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