Robert Steinadler, 10 months ago

Canada: Authorities introduce buying limits for crypto

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?

Rules come into full effect in 2023

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.

The Twitter feud between XRP and Ethereum

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.

Featured articles
Four trading strategies for crypto
Bitcoin and Ethereum: what are the differences?
What determines the Bitcoin price?
Related articles
UK Treasury Committee wants to treat crypto as gambling

May 18, 2023

Many crypto enthusiasts and the broader crypto industry had high hopes for the UK to become the biggest crypto hub next to Europe. An open and efficient regulatory framework was promised, and it was believed that crypto would soon thrive in the country. A royal NFT mint was one of the many indicators that these plans are more than just make-believe. The expectations for crypto in the UK have changed all of a sudden.

Trade anytime, anywhere

Boost your trading impact and reaction time in over 80+ cryptocurrencies via instant access to your portfolio with the LiteBit app.

App Store
Google Play Store
  • 2525 Ventures B.V.
  • 3014 DA Rotterdam
  • The Netherlands
More info
  • About LiteBit
  • Support
  • Sell
  • News
  • Education
Subscribe for updates

Sign up to stay informed via our email updates

Explore popular coins
© 2023 LiteBit - All rights reserved