- The Ontario Securities Commission (OSC) Investor Office released a report on June 28, 2018 discussing the results of a survey of over 2,600 Ontario residents’ knowledge of (and experiences with) cryptocurrencies.
- Entitled Taking Caution: Financial Consumers and the Cryptoasset Sector, the survey concluded that Ontarians generally have little understanding of the regulatory regime surrounding cryptocurrencies, thus supporting the OSC’s continued focus on the blockchain-related topics.
- Note that, while the OSC appears to prefer “cryptoasset”, we use the more common term “cryptocurrency” below.
The results of the survey suggest that 5% of Ontarians age 18 and over – about 500,000 people – currently own cryptocurrencies, with an additional 4% having owned them in the past. While about half of owners spent under $1,000 on these digital assets, 9% (about 50,000 people) have spent $10,000 or more.
How well do Ontarians understand cryptocurrencies?
In order to get a sense of Ontarians’ knowledge of cryptocurrencies, the survey asked respondents six “true-or-false” questions about Bitcoin. Only about 3% of respondents got all six answers right. In case our readers want to try their luck, the six statements were:
- Bitcoin allows for direct transactions between two parties, without a third party involved.
- The total supply of Bitcoin is fixed.
- All Bitcoin transactions are recorded on a distributed ledger that is publicly accessible.
- Bitcoin transactions take place instantaneously.
- Bitcoin is secure from cyberattacks.
- Bitcoin is backed by the government.
(Answers at the end of this post!)
How do Ontarians regard online trading platforms?
The survey also sought to collect information regarding difficulties experienced with online trading platforms. Concerns identified by respondents included trading halts, problems with withdrawing money and a lack of understanding regarding fees. When asked where they would turn for assistance if they had a complaint that could not be resolved by the cryptocurrency issuer or trading platform, 30% of respondents answered that they did not know, while other responses included the Bank of Canada, the Financial Consumer Agency of Canada, the OSC, the police, the local MP or MPP, and the Office of the Superintendent of Financial Institutions.
According to the Investor Office, the risks associated with cryptocurrencies coupled with the lack of knowledge among the general public suggests a need for further public education on the subject. Meanwhile, confusion among Ontarians regarding the regulation of initial coin offerings (“ICOs”) was characterized as a “significant concern”, and the significant number of cryptocurrency owners who have experienced problems with trading platforms was found to support continued regulatory focus by the OSC.
Ultimately, the Investor Office states that the OSC will continue monitoring the blockchain and cryptocurrency industry and take action where necessary to protect investors. IIROC has made cryptocurrencies an area of focus for Fiscal 2019.
The OSC’s answers: 1-3 true; 4-6 false.