Despite cryptoassets becoming a buzzword in the investment space, Ontarians seems to have a limited understanding of the concept, putting them at a disadvantage especially when it comes to risks.
A study by the Ontario Securities Commission (OSC) found that while there is an increasing number of Ontarians being approached about taking part in initial coin or token offerings, understanding and familiarity about cryptoassets seem to be lacking.
According to the study, while cryptocurrency awareness is high, knowledge about these investment vehicles is relatively low. For instance, a large majority of Ontarians have heard of Bitcoin, but 52% said they do not know much about these types of assets.
OSC asked the respondents series of questions to test their knowledge of cryptoassets, however, only 3% correctly identified all six statements correctly.
Meanwhile, the study also revealed that around 5% of Ontarians currently own cryptoassets. Based on recent population estimates, this translates to around 500,000 Ontarians actively investing in cryptoassets.
Roughly half of theses cryptoassets owners have spent less than $1,000 and only 9% admitted spending more than $10,000 for a crypto investment. Majority of these investors own Bitcoin (63%) or Ether (35%).
However, a significant proportion of these investors have experienced issues using a cryptoasset trading platform. Around 21% of cryptoasset owners experienced a halt in trading while 20% encountered difficulties in withdrawing money and transferring money into their platform account. On the other hand, 15% claimed they had difficulties understanding the fees being charged.
OSC also pointed out that 30% of cryptoasset buyers are not sure where to go with a complaint.
"This may indicate that to the extent, cryptoasset buyers have complaints about their experiences with different cryptoasset service providers, these complaints may be diffused among different agencies," the study said.
It furthered: "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."
OSC's Taking Caution: Financial Consumers and the Cryptoasset Sector study can be viewed here.