Taking Caution: Financial Consumers and the Cryptoasset Sector

This report, prepared by the Investor Office of the Ontario Securities Commission (“OSC”), sheds light on financial consumers’ views on and understanding of cryptoassets (commonly referred to as “cryptocurrencies”), as well as the attitudes and behaviours of cryptoasset owners.

Read our full report, Taking Caution: Financial Consumers and the Cryptoasset Sector.

Cryptoassets are designed to serve a variety of purposes. They may be used as, among other things, a store of value, a medium of exchange, or a right that lets you access a product or service. Cryptoassets primarily designed to be a store of value or medium of exchange (e.g., Bitcoin) are often referred to as “digital coinsDigital coins Digital currency that is not regulated by the government. Digital coins are risky, vulnerable to hacking and are often used to support illegal activities. They are decentralized, meaning that no one owns or controls their networks, instead using peer-to-peer structures with hundreds of computers working together to process transactions.+ read full definition.” The termTerm The period of time that a contract covers. Also, the period of time that an investment pays a set rate of interest.+ read full definition “digital tokens” commonly refers to cryptoassets created by a business, often to raise capital and often to allow users to access a service that the business plans to provide in the future.

The vast majority of Ontarians are approaching cryptoassets with caution. Only a small percentage own cryptoassets, and that those who do own cryptoassets tend not to spend substantial sums of money acquiring them.

However, Ontario’s large population means that even small percentages can translate into substantial numbers—numbers sufficient to concern the OSCOSC See Ontario Securities Commission.+ read full definition as a securities regulatory authority.

Five percent of Ontarians currently own cryptoassets

Based on recent population estimatesi, this figure translates into over 500,000 Ontarians currently holding at least some cryptoassets. An additional 4 per cent of Ontarians owned cryptoassets in the past but no longer do.

Half of cryptoasset owners spent under $1,000 on their cryptoassets

For the most part, cryptoasset owners have not spent substantial amounts of money acquiring the cryptoassets they own, with half spending under $1,000, and 90 per cent spending under $10,000. However, 9 per cent of cryptoasset owners—translating to about 50,000 Ontarians—reported spending $10,000 or more acquiring cryptoassets.

Most past and present cryptoasset owners used cash savings to purchase cryptoassets. Of those who used a credit card or otherwise borrowed money, more than 2 in 3 have paid back the money they borrowed in full.

Cryptoasset buyers aren’t sure where to go with a complaint or who regulates ICOs

When given a list of organizations and asked which organization they would go to with a complaint, 30 per cent of past and present cryptoasset owners said they wouldn’t know where they would go for help, and others split evenly between the various organizations listed. This may indicate that, to the extent cryptoasset users have complaints about their experiences with different cryptoasset service providers, these complaints may be diffused among different agencies.

In addition, when asked who they believe regulates ICOs, half of past and present cryptoasset owners responded either that they don’t know who regulates ICOs or that they believe ICOs are not subject to regulation.

This belief is incorrect. Most ICOs are subject to securities regulation. Securities regulatory authorities recently released new regulatory guidance for businesses considering launching ICOs, discussed in the report.

The OSC and other securities regulatory authorities have emphasized the significant risks associated with cryptoassets, and the Investor Office has developed several educational resources in our Cryptocurrencies hub on the characteristics and risks of different types of cryptoassets. The OSC will continue to monitor this sectorSector A part of the economy where businesses provide the same or related products or services. May also refer to a group.+ read full definition as it develops and act to protect investors while also fostering innovation in the capital marketsCapital markets Where people buy and sell investments.+ read full definition.

Read our full report, Taking Caution: Financial Consumers and the Cryptoasset Sector.


i The adult population of Ontario was 11,490,799 as of July 2017. Statistics Canada, Table 17-10-0005-01, Population estimates on July 1st, by age and sex (13 June 2018), https://bit.ly/2afMALX.

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