Canadian crypto exchanges are starting to enforce annual “net purchase limits” on most cryptocurrencies
Editor’s Note: With so much market volatility, stay tuned for daily news! Get caught up in minutes with our quick summary of today’s must-read news and expert opinions. Sign up here!
(Kitco News) – Several cryptocurrency exchanges in Canada have begun introducing measures designed to cap the annual purchase limit for certain crypto assets at $30,000 CAD, a move being made to “protect crypto investors.”
The exchanges in question, Newton and Bitbuy, are both based out of Toronto and have made a move to limit the purchase of certain tokens to comply with orders from the Ontario Securities Commission (OSC) and the securities regulatory authorities of other provinces and territories of Canada.
We are pleased to finally announce our registration with the Ontario Securities Commission (OSC) and the securities regulatory authorities of all Canadian provinces, the Yukon and the Northwest Territories. pic.twitter.com/8zx8UJy2DE
— Newton (@newton_crypto) 16 August 2022
According to a post from Newton, Ontario-based crypto traders will now be subject to a “net purchase limit” on a majority of crypto tokens, excluding Bitcoin (BTC), Ethereum (ETH), Litecoin (LTC) and Bitcoin Cash (BCH).
Newton clarified that Canadian residents living in BC, Alberta, Manitoba or Quebec would not be subject to these limits.
Unfortunately, as noted in a Bitbuy post, residents of the following provinces will be subject to the new purchase limits: New Brunswick, Newfoundland, Nova Scotia, Nunavut, Northwest Territories, Ontario, Prince Edward Island, Saskatchewan, and Yukon.
Bitbuy revealed these changes to its users back in May, providing a more detailed explanation of how the limits would be enforced.
“The limits are defined as ‘net buy limits’, meaning it corresponds to all your crypto purchases minus your sales (at average price) over a rolling 12-month period (last 365 days),” Bitbuy said.
According to a table provided by Bitbuy, the purchase limits of $30,000 CAD will apply to individuals who qualify as “retail investors,” while “qualified investors” will have a purchase limit of $100,000 CAD. Those who qualify as “accredited investors” will not be subject to any purchase limits.
The crypto community is pulling back
The broader cryptocurrency community has responded with criticism of the introduction of purchase limits, including those who accused the OSC of effectively picking winners and losers by limiting access to certain tokens.
The development even drew a response from Ethereum co-creator Vitalik Buterin, who is “Happy to see Ethereum people pushing against regulations that privilege ETH over other legitimate cryptocurrencies.”
Glad to see Ethereum folks pushing against regulations privileging ETH over other legitimate cryptocurrencies.
(I haven’t dug into the details of what specifically happens and to what extent it’s a government thing vs. a corporate compliance decision, but whatever…) https://t.co/NDYPh5rqsk
— vitalik.eth (@VitalikButerin) 17 August 2022
Other social media users were quick to offer Canadian residents solutions to the new borders. A popular suggestion is for affected individuals to circumvent the rules by purchasing large amounts of unlimited tokens and transferring them to a decentralized exchange to exchange for the token of their choice.
Disclaimer: The views expressed in this article are those of the author and may not reflect the views of Kitco Metals Inc. The author has made every effort to ensure the accuracy of the information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is for informational purposes only. It is not an invitation to exchange goods, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept responsibility for any loss and/or damage arising from the use of this publication.
