Canadian Exchanges’ Cap on Annual Purchases Excludes Only Bitcoin, Ethereum, Litecoin and Bitcoin Cash
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In line with regulations, Canadian crypto exchanges are introducing measures to cap the annual buy limit for selected cryptoassets at CAD 30,000 (USD 23,250) per year – and these exclude (only) four large coins.
While the cap will not impact Canadian crypto investors’ capacity to invest in some of the leading coins, it is likely to cut their purchases of a wide range of altcoins.
Canadian crypto exchange Newton said in a statement in which it explains the new limits to its users that, “over the past several months,” they have been “quietly” working on our registration with the Ontario Securities Commission, as well as the securities regulatory authorities in other Canadian provinces and territories, adding:
“You may already be familiar with these changes as they impact all Canadian crypto trading platforms, not just Newton.”
Depending on the customer’s province of residence, they may have net buy limits imposed on their account.
Users will be able to see these limits on the Newton app when they go to place a trade. The limits exclude bitcoin (BTC), ethereum (ETH), litecoin (LTC), and bitcoin cash (BCH).
The limits do not apply to the users who live in British Columbia, Alberta, Manitoba, or Quebec, according to the platform.
This means that the annual net buy limit will be imposed on the inhabitants of the following Canadian provinces: New Brunswick, Newfoundland, Nova Scotia, Nunavut, Northwest Territories, Ontario, Prince Edward Island, Saskatchewan, and Yukon.
Newton said that the regulatory changes were developed with the aim “to protect crypto investors […] and to make sure investors are aware of the risks associated with investing in crypto assets.”
Similarly, Canadian crypto exchange Bitbuy announced limits earlier in the year, stating:
“The limits are defined as “net purchase limits”, meaning it tallies up all of your crypto purchases minus your sells (at average cost), over a rolling 12 month period (last 365 days).”
As in the case of Netwon, there are no limits on BTC, ETH, LTC, and BCH, while “all other coins combined” have a limit between CAD 30,000 in net purchases (total purchases (at purchase price) minus total sells (at average cost)) in the last 12 months for retail investors, and CAD 100,000 for eligible investors.
Still, the latest development has triggered numerous reactions across the cryptosphere.
Ethereum co-founder Vitalik Buterin said that he is glad to see the push-back against these regulations:
Glad to see Ethereum people pushing against regulations that privilege ETH over other legitimate cryptocurrencies.
— vitalik.eth (@VitalikButerin) August 17, 2022
(I have not dug into the details of what specifically is going on and to what extent it's a gov thing vs a compliance decision of one business, but either way…) https://t.co/NDYPh5rqsk
Simon Dixon, CEO and Founder of BNKtothefuture.com, tweeted that if “you are doing something silly like Canada best to go with % of Net Worth rather than annual sum”.
However, Cale Moodie, President and CEO of Neptune Digital Assets, argued that the outrage against Newton’s announcement is “an example of how Twitter users spin information to enrage people. It’s a broker law that means regulated brokers can’t load up on shitcoins in their client accounts in certain provinces. It won’t impact any individual in Canada,” Moodie claimed.
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Learn more:
– 13% of Surveyed Canadians Owned Bitcoin in 2021, Up from 5% in 2020 – Bank of Canada
– What Can We Learn from Canadian Crypto Freeze as War in Europe Rages On?
– Canada’s Bitvo Acquired by FTX
– WonderFi Acquires Canadian Exchange BitBuy, Aims to Become Largest BTC/CAD Market
– Canadian Regulator Reports Coinbase, Kraken CEOs’ Crypto Custody Tweets
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