Several Canadian cryptocurrency exchanges set annual cryptocurrency purchase limits to protect investors.
According to Ontario Securities Commission (OSC), Toronto-based exchanges Bitbuy and Newton will set purchase limits for certain cryptocurrencies up to a maximum limit of $30,000. It looks like more cryptocurrency exchanges will follow the same principle.
Bitbuy divides its investors into three categories:
- retail investors
- eligible investors
- sophisticated investors.
Retail investors will have an annual purchase limit of $30,000 for all cryptocurrencies, while sophisticated investors will be limited to $100,000 worth of purchases. For sophisticated investors, there are no limits.
Bitbuy’s new changes will affect residents of the following provinces: New Brunswick, Newfoundland, Nova Scotia, Nunavut, Northwest Territories, Ontario, Prince Edward Island, Saskatchewan and Yukon.
Newton was officially registered as “limited dealer” and is therefore subject to the regulations set out by OSC.
Newton will set an annual purchase limit of $30,000 for all cryptocurrencies except Bitcoin, Bitcoin Cash, Ethereum and Litecoin. These limits reset 12 months after your first purchase.
Only residents of British Columbia, Alberta, Manitoba and Quebec are exempt from these restrictions.
According to OSK the new limits are being implemented to “protect investors” and ensure investors are “aware of the risks associated with investing in crypto assets.”
The OSC is tightening cryptocurrency regulations and now requires exchanges to ask customers questions about their financial situation, employment and investment risks after registering on 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 exchange for the token of their choice.
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