Vitalik cheers Ethereum community push back over harsh Canadian crypto rules
The Ontario Securities Commission has implemented CAD$30,000 annual buy limits for some Canadians, drawing criticism from across the community.
Ethereum co-founder Vitalik Buterin commended community members for speaking out against new Canadian rules limiting crypto buys.
Glad to see Ethereum people pushing against regulations that privilege ETH over other legitimate cryptocurrencies.
(I have not dug into the details of what specifically is going on and to what extent it's a gov thing vs a compliance decision of one business, but either way…) https://t.co/NDYPh5rqsk
— vitalik.eth (@VitalikButerin) August 17, 2022
Canadian exchanges Bitbuy and Newton are imposing CAD$30,000 ($23,100) annual buy limits on all tokens except Bitcoin, Ethereum, Litecoin, and Bitcoin Cash. However, this does not apply to British Columbia, Alberta, Manitoba, or Quebec residents.
Some social media users pointed out that affected individuals can bypass the rules by loading up on unrestricted tokens, transferring to a decentralized exchange, and swapping into the token of their choice.
The move, mandated by the Ontario Securities Commission (OSO), has drawn criticism from several prominent crypto industry figures.
OSO wants to protect investors
Toronto-based Newton posted a notice detailing the new OSO rules, adding that this “impact[s] all Canadian crypto trading platforms.”
The notice explained that the OSO is bringing the changes to “protect crypto investors” and to increase awareness of the risks related to cryptocurrency investing.
“These changes are to protect crypto investors, like yourself, and to make sure investors are aware of the risks associated with investing in crypto assets.”
As well as the annual buy limits, Newton said its users will now be required to complete a trading questionnaire before being allowed to trade. This is to collect information on users’ trading experience, personal financial situation, and risk tolerance.
Portfolios will have set loss levels assigned based on the risk tolerance stated in the trading questionnaire. Loss notifications will be sent as the user’s portfolio approaches the loss level indicated.
Buterin praises the Ethereum community
The CEO of investment platform BnkToTheFuture, Simon Dixon, called this “silly,” as the regulations do not take into account an individual’s net worth.
What’s more, Dixon pointed out that the rules, which exclude certain tokens, create a two-tier system, in effect picking winners and losers. This goes against the remit of regulators, who should oversee with neutrality.
If you are doing something silly like Canada 🇨🇦 best to go with % of Net Worth rather than annual sum – New regulatory changes in Canada for crypto. You are allowed to buy as much #BTC / $ETH / $LTC / $BCH as you want, but any other crypto has a limit of 30k net buy per year. 🤮 pic.twitter.com/IPrZq4k6S1
— Simon Dixon (Beware Impersonators) (@SimonDixonTwitt) August 18, 2022
Likewise, David Hoffman, the CEO of the crypto media outlet Bankless, expressed disbelief over the CAD$30,000 annual limit on restricted tokens. He said it makes little sense to severely restrict investors’ allocation choice.
"You buy $20,000 of Solana (SOL), a restricted cryptocurrency. You’ve now used $20,000 of your $30,000 annual limit. If you want to purchase more crypto, you are limited to buy a maximum of $10,000"
— DavidHoffman.eth 🦇🔊🏴 (@TrustlessState) August 17, 2022
Buterin chimed in, saying it’s encouraging that the Ethereum community is voicing their grievances, even though ETH, in its privileged position, is not affected by the new rules.