Several Canadian crypto exchanges are setting annual buy limits on cryptocurrencies to protect investors.
In compliance with Ontario Securities Commission (OSC), Toronto-based exchanges Bitbuy and Newton will be setting buy limits on certain cryptocurrencies up to a maximum limit of $30,000. It seems like more crypto exchanges will follow the same rule.
Bitbuy classifies its investors into three categories:
- retail investors
- eligible investors
- sophisticated investors.
Retails investors will have an annual purchase limit of $30,000 on all cryptocurrencies while sophisticated investors are limited to $100,000 purchases. There are no limits for sophisticated investors.
Residents of the following provinces will be affected by Bitbuy’s new changes: New Brunswick, Newfoundland, Nova Scotia, Nunavut, Northwest Territories, Ontario, Prince Edward Island, Saskatchewan, and Yukon.
Newton has officially registered as a “restricted dealer” and is therefore subject to regulations set by the OSC.
Newton will set an annual purchase limit of $30,000 on all cryptocurrencies except bitcoin, Bitcoin Cash, Ethereum and Litecoin. These limits reset 12 months after the first purchase.
Only residents of BC, Alberta, Manitoba and Quebec are exempt from these limits.
According to the OSC the new limits are being implemented to “protect investors” and to ensure investors “are aware of the risks associated with investing in crypto assets.”
The OSC is tightening up regulations around cryptocurrency and now requires exchanges to ask customers questions regarding their financial status, employment, and investment risks upon signing up to exchanges.
One way users can avoid the new limits is to purchase large amounts of unrestricted coins and transfer them to a decentralized crypto wallet and use a decentralized exchange to swap for the token of their choice.
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