Cryptocurrency exchanges based in Canada are imposing an annual buy limit of 30,000 CAD for restricted coins. The limit that applies to Ontario-based users has been imposed to protect consumers as Canadian regulators continue to tighten the crypto regulatory framework.
Ontario exchanges impose a 30,000 CAD buy limit
The two exchanges that have enforced this limit are Newton and Bitbuy. Newton is a cryptocurrency exchange based in Toronto, and these changes come as the firm pursues registration approval from the Ontario Securities Commission and other regulatory authorities in Canada.
On Tuesday, the exchange said that the limit would protect investors and ensure they know the risks of investing in crypto. The new changes will see traders on New and other Canadian-based exchanges be subject to an annual limit of 30,000 CAD. The limit will apply to all cryptocurrencies apart from Bitcoin, Ether, Bitcoin Cash, and Litecoin.
Your capital is at risk.
Newton also said that if a trader bought and later sold a restricted altcoin, the sold amount would be deducted from the limit. The limit resets every 12 months after the first purchase of the coins.
The exchange will also have a “trading questionnaire” to collect information from users. The gathered information will involve their experience trading cryptocurrencies, knowledge of investing in crypto, and risk appetite. The user will need this information to continue funding the account and trade on the exchange.
Traders will also receive a notification that their portfolio is at a loss level indicated in the questionnaire. The other exchange imposing similar limits is Bitbuy. Bitbuy said that the restrictions would apply to users based in several provinces. Traders will also fill out a questionnaire to determine if they are retail investors.
Crypto regulations in Canada
Canadian regulators have shown vigilance in regulating the cryptocurrency sector. Besides focusing on consumer protection, the regulators are also looking into other areas. In April last year, the Canadian federal government announced a legislative review on the financial sector, focusing on boosting the scalability and security of digital currencies and launching a central bank digital currency (CBDC).
The Newton exchange claims to be a “low cost crypto trading platform” in Canada. The exchange was created in 2018 and has grown to become one of the most popular exchanges in Canada. The exchange surpassed 100,000 users in February 2021.