Canada-based crypto exchanges Bitbuy and Newton are enforcing a 30,000 Canadian dollars annual “buy limit” for “restricted coins” for their users based in Ontario in order to “protect consumers” amid tightened regulations.
Newton, a Toronto-based crypto exchange announced the new changes come after working on getting registered with the Ontario Securities Commission and the securities regulatory authorities in other provinces and territories of Canada, noting in a Tuesday post:
“These changes are to protect crypto investors, like yourself, and to make sure 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 30,000 CAD “net buy limit” on all cryptocurrency coins excluding Bitcoin (BTC), Bitcoin Cash (BCH), Ether (ETH), and Litecoin (LTC).
Newton further clarified that if a trader bought and then sold a restricted coin, the sell amount would be subtracted from the limit. The limit resets every 12 months from the first purchase of restricted coins.
The buy limits come as the crypto platform announced on Wednesday that it has officially registered as a “restricted dealer” in the province of Ontario, which meant that they’re now subject to the regulations set out by the Ontario Securities Commission (OSC).
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
Other changes aimed at consumer protection include a “trading questionnaire,” in which the exchange is required to collect information from users about their past experience and knowledge of crypto investing, financial situation, and risk tolerance — which is required to be completed to continue funding the account and trading on the platform.
The crypto exchange will also send traders a notification if the trader’s portfolio receives a loss level that they indicated in the questionnaire that they’re not comfortable with.
Canadian crypto exchange Bitbuy also confirmed similar purchase limits earlier in the 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.
Similar to Newton, Bitbuy requires traders to fill out a questionnaire to determine whether the investor qualifies as a Retail Investor, Eligible Investor or Sophisticated Investor. However, while Retail Investors remain subject to the 30,000 CAD buy limit, Eligible Investors’ buy limit is upped to 100,000 CAD and no purchase limit exists for Accredited Investors.
Newton provided traders with a snapshot of what they should expect to see when the new rules take effect.
The Ontario province alone accounts for nearly 40% of the Canadian population, with Toronto being the major metropolitan hub.
Newton noted that each province and territory of Canada has its own securities regulatory authority, which combined, makes up the Canadian Securities Administrators (CSA).
Related: Cleaning up crypto: How much enforcement is too much?
Consumer protection isn’t the only focus of Canadian regulators either. In April 2021, the Canadian federal government announced that it would undergo a legislative review on 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 dubs itself as “Canada’s trust 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 Feb. 2021.
Source: https://cointelegraph.com/news/ontario-crypto-exchanges-impose-30k-annual-limit-on-altcoin-buys