According to the new terms and conditions of cryptocurrency trading platform Newton, Canada is limiting investments to $30,000 per year. While this does not affect all assets or all provinces in the country, the news raises questions about the freedom to dispose of one’s finances.
In Canada, law limits investment in cryptocurrencies
Depending on which country you’re in, sometimes we complain about the regulation of cryptocurrencies, but in Canada, the laws sometimes take the form of restrictions. Indeed, according to the new terms and conditions of Newton, a local exchange, investors have a limit on their overall investments of 30,000 Canadian dollars per year.
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
There are some subtleties to this measure. For example, the following assets are not affected by these caps:
- Bitcoin (BTC);
- Ethereum (ETH);
- Litecoin (LTC);
- Bitcoin Cash (BCH).
Similarly, not all provinces in the country are on the same page. For example, the following are not affected:
- Alberta ;
- British Columbia;
- Manitoba ;
- Quebec.
Newton users are asked to fill in a questionnaire to assess their knowledge of cryptocurrencies. If they are sufficiently knowledgeable, they will be granted access to the platform, and the $30,000 limit will be reset on each anniversary date of completing the questionnaire.
Note also that the “latent consumption” of this limit is variable. This means that if a user has bought 10,000 dollars worth of SOL, for example, he or she will logically have 20,000 dollars of “credit” left. But if he sells $5,000, this credit will be readjusted to $25,000. It is important to understand that this is not $30,000 per altcoin, but rather on all assets except those mentioned above.
The compliance of exchanges
These measures are in fact in response to directives from the Ontario Securities Commission (OSC), as well as the Canadian Securities Administrators (CSA).
In order to remain compliant to continue operating on Canadian soil, the regulators actually require exchange platforms to proceed with a pre-registration undertaking. This allows cryptocurrency exchanges to certify their willingness to comply with the rules in Canada. Crypto.com, for example, has already complied with these orders.
Although many investors will not really be penalised by these restrictions, this still raises questions about the freedom to dispose of one’s finances. Indeed, this is an additional argument for turning to self-guarding.
