Ontario crypto exchanges impose $30K annual limit on altcoin purchases

by · August 17, 2022

Canada-based crypto exchanges Bitbuy and Newton are enforcing an annual $30,000 (CAD) “purchase limit” for “restricted coins” for their users based in Ontario to “protect consumers” amid tightened regulations.

Newton, a Toronto-based crypto exchange announced that the new changes come after working to register with the Ontario Securities Commission and the securities regulatory authorities of other provinces and territories in Canada, noting in a post on August 16:

“These changes are to protect crypto investors, like yourself, and to ensure that investors are aware of the risks associated with investing in crypto assets.”

Under the new changes, Ontario-based crypto traders on Newton and other Canadian crypto platforms will be subject to an annual “net purchase limit” of $30,000 (CAD) on all cryptocurrency coins except Bitcoin (BTC), Bitcoin Cash (BCH), Ethereum (ETH) , and Litecoin (LTC).

Newton further clarified that if a trader bought and then sold a restricted coin, the amount of the sale would be deducted from the limit. The limit resets every 12 months from the first purchase of limited coins.

The purchase limits come as the crypto platform announced on Wednesday that it has officially registered as a “limited dealer” in the province of Ontario, which meant that it is now subject to the regulations set by the Ontario Securities Commission (OSC).

Other changes aimed at consumer protection include a “trading questionnaire”, where the exchange is required to collect information from users about their previous experience and knowledge of crypto investing, financial situation and risk tolerance – which must be completed in order to continue funding. the account and trading on the platform.

The crypto exchange will also send traders an alert if the trader’s portfolio receives a level of loss that they have indicated in the questionnaire that they are not comfortable with.

Canadian crypto exchange Bitbuy also confirmed similar purchase limits earlier this year, noting that similar restrictions also apply to users in the provinces of Manitoba, New Brunswick, Newfoundland and Labrador, Nova Scotia, Prince Edward Island, Northwest Territories, Nunavut and Yukon.

Like Newton, Bitbuy requires traders to fill out a questionnaire to determine if the investor qualifies as a retail investor, qualified investor or sophisticated investor. However, while retail investors are still subject to the $30,000 purchase limit, qualified investors’ purchase limit has been increased to $100,000, and there is no purchase limit for accredited investors.

Newton gave traders a snapshot of what they can expect to see when the new rules take effect.

Source: Newton

The province of Ontario alone accounts for nearly 40% of the Canadian population, with Toronto as the largest metropolitan hub.

Newton noted that each province and territory in Canada has its own securities regulatory authority, which together make up the Canadian Securities Administrators (CSA).

Related: Cleaning Up Crypto: How Much Enforcement Is Too Much?

Nor is consumer protection the sole focus of Canadian regulators. In April 2021, the Canadian federal government announced that it would undergo a legal review of the financial sector, with a particular focus on improving the stability and security of digital currencies, and establishing a central bank digital currency (CBDC).

Newton, which bills itself as “Canada’s trusted low-cost crypto trading platform” was founded in 2018 and is currently one of the most popular exchanges in Canada, having surpassed 100,000 users in February 2021.