Nine provinces in Canada have decided to limit the amount of crypto that can be bought in a year. The province has set an annual limit of $30,000 as the maximum amount of crypto that can be purchased. However, there are four notable exceptions for cryptocurrencies under this rule.
Bitcoin, Ethereum, Litecoin and Bitcoin Cash are exempt from this rule. As a result, those four tokens will not count towards the buyer's annual limit.
Why Canada Limits Crypto
Nine provinces have formed regulations to protect consumers from the volatility of the crypto market. The nine provinces that will enforce these regulations are:
Ontario
Newfoundland
New Brunswick
Nova Scotia
Nunavut
Northwest Territories
Prince Edward Island
Saskatchewan
Yukon
The rule will not affect the provinces of Alberta, British Columbia, Quebec and Manitoba. The limit set by nine provinces is $30,000. However, the debut limit will reset after every 12 months. The rules also provide certain exemptions based on the type of investor. In addition, certain types of investors, their income and net worth are also taken into account.
David Hoffman, the founder of Bankless, expressed his disappointment and surprise at the steps taken by Canada. Furthermore, Hoffman also revealed that this move could bring advantages for DeFi protocols like Uniswap. Uniswap will allow users to buy unlimited cryptocurrencies and earn limited currencies. Whether the rules prohibit any such moves remains unclear.
Vitalik Buterin, the founder of Ethereum, also echoed other analysts as many Ethereum supporters also criticized the move. Importantly, the regulation does not set limits on Ethereum, which could give it a competitive advantage over other competitors. Despite this, many Ethereum supporters have criticized Canada's move.
According to reports, Bitbuy and Newton, Canada's two largest exchanges have already agreed to enforce the move.
