Canada cracks down hard on crypto trading

A regulatory scandal has just come to light in Canada.

A regulatory scandal has now come to light in Canada. From now on, the state will have control over crypto investments and will determine how much can be invested in which cryptocurrency. This is the background.

Not Russia or India, but Canada, which is liberal in principle, is now intervening massively in crypto trading. The Ontario Securities Commission (OSC), or the regional securities regulator of the province of Ontario, has decided that crypto exchanges must submit to its new regulations. Anyone who wants to act as a fully regulated crypto trader must now introduce purchasing limits for cryptocurrencies. The new regulation applies to the following regions in Canada: Manitoba, New Brunswick, Newfoundland and Labrador, Nova Scotia, Ontario, Prince Edward Island, Northwest Territories, Nunavut, and Yukon.

Private investors from these regions are only allowed to invest 30,000 Canadian dollars (CAD) per year in altcoins through official trading platforms. Professional investors are allowed to invest 100,000 Canadian dollars. The following cryptocurrencies are exempt, which investors can continue to purchase indefinitely: Bitcoin, Ethereum, Litecoin and Bitcoin Cash. So much for the facts.

Canada: Paternalism instead of consumer protection

The fact that the state is now dictating its own crypto wallet strategy is a scandal. Under the guise of consumer protection, they want to protect investors against bad investments. This is seen as an infringement of the freedom of investors.

For example, by stating that Bitcoin Cash and Litecoin can be purchased indefinitely, but a Cardano or Polkadot coin can only be purchased for a maximum of CAD 30,000 per year, the authority is giving a dangerous suggestion of security. Uninitiated investors might think that Bitcoin Cash is a particularly promising and safe project.

Canadian Consumer Protection: Taking Penny Stocks and Leveraged Certificates to Insolvency

When one considers that Canadian retail investors can invest indefinitely in dubious penny stocks or leveraged derivatives where total loss is within reach, the new directive seems particularly absurd.

Every small investor has countless options to gamble away his or her assets within minutes, but investing 35,000 CAD in Cardano (ADA), for example, is prohibited. Neutrality, as required of the state in this context, is being thrown overboard. One can only fervently hope that this politically motivated wrong decision will be reversed soon.

Crypto speculation still allowed for pension funds

It is even more cynical that the Canadian pension fund CDPQ has to write off CAD 200 million because it invested in Celsius. As an institutional investor, you are still allowed to speculate in the crypto lending sector. The guidelines outlined above apply only to private and professional investors.”