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I've got a beef with Burger King's latest shtick. The burger company has announced the introduction of a new cryptocurrency in Russia, called WhopperCoin. Like its better-known cousin bitcoin, WhopperCoin uses blockchain technology. What makes the WhopperCoin distinct is that users accumulate more of it not through computer mining, as with bitcoin, but rather by purchasing Burger King's sandwiches.

What causes me the most concern about Burger King's offering is their spokesperson's claim that the WhopperCoin is an "investment vehicle." Describing any cryptocurrency as an investment, especially one linked to the number of burgers one buys, may well be the definition of a whopper. But let me be clear: No one should consider this coin offering or any cryptocurrency to be an investment.

As with bitcoin, the market value of the WhopperCoin will fluctuate in value based purely on sentiment and the direction of the wind, not based on anything linked to economic fundamentals. Hence its price will be prone to wild gyrations that make it most unsuitable for all but gamblers seeking extremely high-risk ways to speculate. Furthermore, Burger King retains the right to shut down the market for WhopperCoin whenever it sees fit, an action that would render all the coins in circulation as worthless. Again, this does not make for great investment material.

What I commend Burger King for is their catchy marketing. The WhopperCoin is essentially a loyalty program for people who buy burgers. The use of the blockchain technology as the basis for recording loyalty points is a first, to the best of my knowledge. No one can blame a publicly traded company for trying to hitch a ride on the bitcoin bubble by labelling their rewards program as a cryptocurrency. But making explicit statements about its suitability as an investment product is outright dangerous and would certainly land the company in hot water if expressed in Canada.

The recent global craze for cryptocurrencies has not only fuelled the price of a bitcoin to new heights of more than $4,500 (U.S.) in recent days, it has also caught the attention of the Ontario Securities Commission and the Canadian Securities Administrators. These regulators have noticed an alarming proliferation of "initial coin offerings" and "initial token offerings," whereby companies raise capital in exchange for digital currency, and they have highlighted the potential harms that can arise to investors and have urged players in Canadian capital markets to ensure they are respecting all securities law requirements.

Burger King may be sincere in introducing its new loyalty program and playful with the use of language such as "investment," but cryptocurrencies are fast gaining recognition among regulators as potential shell games, and so caution is warranted. Time will tell whether Burger King has bitten off more than it can chew with its new Russian cryptocash. Meanwhile, investors should be on the look-out for similar shenanigans closer to home.

Lisa Kramer is a professor of finance at the University of Toronto. You can follow her on Twitter at @LisaKramer

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