Robert Steinadler, 10 months ago
There have been quite a few things this year that got the crypto community upset. With the latest blow against Tornado Cash many fear that open-source software and free speech could become endangered. But it doesn’t stop there. The OSFI in Canada wants to make sure that retail investors stay warm, cozy, and well-protected. Generally, a good idea since especially retail investors often lack the experience and take the risk to invest in something that they might not fully understand.
Why is the OSFI limiting access to crypto and why is everybody so upset about it?
The new regulatory approach is generally not a bad idea. Cryptocurrencies are still highly unregulated as Canadian lawmakers and authorities are being late to decide how they like to see things being handled by exchanges, brokers, and other crypto-related services.
According to the interim rules, retail investors have a yearly buying limit of 30.000 CAD that applies to most cryptos. If an investor can prove that he is qualified and more experienced he can get upgraded to a level of 100.000 CAD. It is not clear why regulations draw the line at these numbers but it is not only the limit that is concerning to many investors.
The limits only apply to a certain set of cryptos. As two Canadian exchanges already implemented the rules only recently it becomes clear that there is an exception for Bitcoin, Ethereum, Bitcoin Cash, and Litecoin. Retail investors can buy these four cryptos without any limits, thus taking the full up and downside of their investment decisions. Since all cryptocurrencies are highly volatile it is unclear why there are exceptions when protecting retail investors. The only hope is that these interim guidelines can be suspect to change since the OSFI is looking into the results and might be willing to adjust the rules in accordance with lawmakers and other committees.
But the story doesn’t stop there. In the light of the recent events, Vitalik Buterin made it clear via Twitter that he believes that other cryptos should enjoy the same status as Ethereum. He also reiterated his stance that he believes that no action should be taken against proof of work.
When podcaster David Hoffman replied that he wouldn’t mind if restrictions would apply to XRP, Buterin added that XRP lost its rights to protection when trying to throw Ethereum under the bus. Ripple is still fighting a lawsuit against the SEC over the question if XRP is a security. The company argued in 2020 that Bitcoin and Ethereum are susceptible to the control of China, claiming that the US would hurt itself by banning an all-American product like XRP by classifying it as a security.
David Schwartz, CTO at Ripple, was quick to react and pointed out that Buterins words are in no way better. It seems that there is still a lot of bad blood in the industry when it comes down to the question of whether it makes sense to compare cryptos with each other or not. Sometimes a little bit of bashing is fun but it is clear that this space won’t improve when industry leaders decide to go against each other.
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