Canadian crypto exchanges begin to enforce annual ‘net buy limits’ on the majority of cryptocurrencies
(Kitco News) - Several cryptocurrency exchanges in Canada have begun introducing measures designed to cap the annual buy limit for certain crypto assets at $30,000 CAD, a move that is being done in order 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 in order to comply with orders from the Ontario Securities Commission (OSC) and the securities regulatory authorities in other provinces and territories of Canada.
We're excited to finally announce our registration with the Ontario Securities Commission (OSC) and the securities regulatory authorities in all Canadian provinces, Yukon, and Northwest Territories. pic.twitter.com/8zx8UJy2DE— Newton (@newton_crypto) August 16, 2022
According to a post from Newton, Ontario-based crypto traders will now be subject to a "net buy limit" on a majority of crypto tokens, excluding Bitcoin (BTC), Ethereum (ETH), Litecoin (LTC) and Bitcoin Cash (BCH).
Newton clarified that Canadian residents that live in BC, Alberta, Manitoba or Quebec would not be subject to these limits.
Unfortunately, as noted in a post from Bitbuy, residents of the following providences will be subject to the new buy 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 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)," Bitbuy said.
According to a table provided by Bitbuy, the $30,000 CAD purchase limits will apply to individuals who qualify as "retail investors," while "eligible investors" will have a purchase limit of $100,000 CAD. Those who qualify as "accredited investors" will not be subject to any purchase limits.
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The crypto community pushes back
The wider cryptocurrency community has responded with criticism to the imposition of buying limits, including those who charged the OSC with 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 "Glad to see Ethereum people pushing against regulations that privilege ETH over other legitimate cryptocurrencies."
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
Other social medial users were quick to offer Canadian residents solutions to the new limits. One popular suggestion is for affected individuals to bypass the rules by purchasing large amounts of unrestricted tokens and transferring them to a decentralized exchange to swap for the token of their choosing.