The Ontario Securities Commission has implemented CAD$30,000 annual buy limits for some Canadians, drawing criticism from across the community.
Key insights
Karsten Wenzlaff, Advisor
August 26th, 2025
Karsten Wenzlaff is a Crowdfunding and Fintech Expert from Germany. He is Secretary-General of Digit[...]
Category Archives: Blockchain, Crypto, Digital Assets Regulations
Crypto Exchanges Comply But Ethereum Community Unhappy About Harsh Canadian Rules
CryptoSlate | Samuel Wan | Aug 18, 2022
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.
- Newton: “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.
- 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.
See: Canadian Securities Regulators Expect Crypto Trading Platforms to Complete Pre-Registration Step
Simon Dixon, CEO/Co-founder, BnkToTheFuture.com:
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.
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
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Cointelegraph | Brayden Lindrea | Aug 18, 2022
Canada-based crypto exchanges Bitbuy and Newton are enforcing a 30,000 Canadian dollars annual “buy limit” for “restricted coins” for their users based in Ontario in order to “protect consumers” amid tightened regulations.
Under the new changes, Ontario-based crypto traders on Newton and other Canadian crypto platforms will be subject to an annual 30,000 CAD “net buy limit” on all cryptocurrency coins excluding Bitcoin (BTC), Bitcoin Cash (BCH), Ether (ETH), and Litecoin (LTC).
See: OpEd: No, Crypto Exchanges Are Not Like Stock Exchanges | New Approaches May Help Solve Old Problems
Newton further clarified that if a trader bought and then sold a restricted coin, the sell amount would be subtracted from the limit. The limit resets every 12 months from the first purchase of restricted coins.
The buy limits come as the crypto platform announced on Wednesday that it has officially registered as a “restricted dealer” in the province of Ontario, which meant that they’re now subject to the regulations set out by the Ontario Securities Commission (OSC).
We’re excited to finally announce our registration with the Ontario Securities Commission (OSC) and the securities regulatory authorities in all Canadian provinces, Yukon, and Northwest Territories. pic.twitter.com/8zx8UJy2DE
— Newton (@newton_crypto) August 16, 2022
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The National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org
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Strategies for Protecting NFT Brand/product IP in the Metaverse
Herbert Smith Freehills | Andrew Moir and Pietro Pouche | Aug 16, 2022
The creation (“minting”) and sale and use of NFTs raises many IP issues which we have discussed in our previous posts in our IP in NFTs series. However, brand owners and product manufacturers must also be vigilant in monitoring the virtual marketplaces to ensure that third parties are not creating NFTs that infringe their own IP rights. This is especially true where the company is considering releasing or has released NFTs, because the public will begin to associate the brand with NFTs (which could include infringing NFTs). There are several strategies that companies could adopt to minimise this risk.
Strategies for product and brand protection
Companies should become familiar with the NFT marketplaces and conduct periodic searches to see if any of their IP is being traded without their knowledge. Image matching technology, such as Google’s reverse image search, can also be used to check whether specific image files are present on unauthorised domains.
See: Intellectual Property and NFTs: What you need to know
It is also important for companies to be clear and open about their involvement in the NFT space, including making it easy for the public to see how many legitimate NFTs have been sold by the company and where these are available for sale.
The EUIPO has recently issued guidance notes in relation to trade marks and NFTs entitled “Virtual goods, non-fungible tokens and the metaverse” clarifying the approach that it is taking for applications containing terms relating to virtual goods and NFTs, which applications it says are increasing.
- Virtual goods: From a classification point of view the EUIPO says that” virtual goods are proper to Class 9 because they are treated as digital content or images. However, the term virtual goods on its own lacks clarity and precision so must be further specified by stating the content to which the virtual goods relate (e.g. downloadable virtual goods, namely, virtual clothing)”. The guidance confirms that the 12th Edition of the Nice Classification will incorporate “the term downloadable digital files authenticated by non-fungible tokens in Class 9″.
- NFTs: The EUIPO also comments that NFTs are treated as unique digital certificates registered in a blockchain, which authenticate digital items but are distinct from those digital items. The guidance states that for the EUIPO, the term “non fungible tokens on its own is not acceptable”. The type of digital item authenticated by the NFT must be specified.
See: A new way of measuring the elusive value of intellectual property
- Services: The EUIPO’s guidance says that services relating to virtual goods and NFTs will be classified in line with the established principles of classification for services.
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The National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org
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Want Institutional Adoption? You Have to Sacrifice Tornado Cash, says Kevin O’Leary
Cointelegraph | Brayden Lindrea | Aug 14, 2022
Mr. Wonderful thinks that crypto needs more regulation and less “crypto cowboys” like Tornado Cash creator Alexey Pertsev, who he suggested was a necessary sacrifice to create stability for institutional inflows.
Kevin O’Leary, Shark Tank host and venture capitalist:
- Ethereum-based crypto mixer Tornado Cash are a part of a “crypto cowboy” culture that shouldn’t have a place in the industry. Instead, crypto needs a “rules-based environment” in order to attract real institutional capital into the digital-asset industry, and much of that regulation needs to stamp out protocols like Tornado Cash, which enables users to conduct anonymous transactions and therefore potentially engage in criminal activity.
“At the end of the day, it’s okay to arrest that guy. Why? He’s messing with the primal forces of regulation [...] If we have to sacrifice him, that’s okay, because we want to have some stability in that institutional capital.”
See: Analysis: Into the Eye of a Tornado | Sanctions Compliance Best Practices for Crypto Businesses
Gnosis co-founder Stefan George:
- he protocol brings “much-needed privacy” to Ethereum and that writing open-source software should be recognized as “an expression of free speech.”
Patrick Collins, Chainlink Lead Developer Advocate:
- the decision to remove Tornado Cash’s GitHub account is “much worse than sanctioning a website,” as code is speech and, by doing so, the U.S. Treasury is violating the first amendment of the U.S. Constitution.
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Protocol | Aug 15, 2022
Spinning Crypto Perspectives
Dutch authorities say there may be more arrests. The Netherlands’ Financial Advanced Cyber Team, part of the country’s Fiscal Information and Investigation Service, began investigating Tornado Cash in June.
See: How do intellectual property rights apply to AI?
- The arrested man’s name is Alexey Pertsev, his wife confirmed to the Block. He was apprehended last Wednesday in Amsterdam’s city center, two days after the United States issued sanctions against Tornado Cash. Pertsev is not a founder of Tornado Cash. The founders are Roman Semenov and Roman Storm. Neither has been arrested, and neither responded to Protocol’s requests for comment.
- According to Dutch authorities, Pertsev is “suspected of involvement in concealing criminal financial flows and facilitating money laundering,” — not personally disobeying sanctions or making other illegal money transfers with his own funds.
Liability for contributing code is a complex question. Much depends on the specifics of a country’s law.
- In the United States, for example, posting code on GitHub is legal in most cases so long as it’s not a violation of intellectual property law. That’s because code is viewed as speech protected by the First Amendment.
- Jeffrey Blockinger, general counsel at Quadrata, says most developers don’t need to be concerned about an arrest. “While privacy concerns are legitimate, this arrest is reportedly focused on evidence of actual criminal activity,” he told Protocol. Quadrata, which provides an identity layer for blockchains, says it can help block people subject to sanctions and other bad actors from completing transactions.
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The National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org
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Canadian Securities Regulators Expect Crypto Trading Platforms to Complete Pre-Registration Step
CSA | Release | Aug 15, 2022
TORONTO – The Canadian Securities Administrators (CSA) is providing an important update to crypto trading platforms that continue to operate in Canada while they take steps to comply with applicable securities legislation.
CSA members now expect such platforms to provide a pre-registration undertaking to their principal regulator to continue operations while their application is reviewed. By giving these undertakings, crypto trading platforms agree to comply with terms and conditions that address investor protection concerns and are consistent with requirements currently applicable to registered platforms.
The Ontario Securities Commission today published the first pre-registration undertakings, filed by Coinsquare Capital Markets Ltd. and Crypto.com. CSA members are in discussions with other crypto trading platforms about providing pre-registration undertakings. Once provided, these undertakings will be published on the CSA’s website.
See: CSA Regulatory Sandbox / Crypto Asset Trading Platform Decisions
CSA members may take action if a crypto trading platform is not prepared to file an undertaking or does not abide by the terms of an undertaking.
On March 29, 2021, the CSA and the Investment Industry Regulatory Organization of Canada published a notice outlining securities law requirements that apply to crypto trading platforms.
All crypto trading platforms that are registered in Canada or that have provided a pre-registration undertaking to a CSA member are listed on the CSA’s website.
View the original release --> here
McCarthy Tetrault | Lori Stein and Rene Sorell| Aug 16, 2022
Select Analysis on Initial Pre-registration Undertakings by Coinsquare and Crypto.com
- Coinsquare and Crypto.com agree to adopt policies and procedures to ensure that their advertising and social media use is fair, balanced and not misleading, having regard to CSA guidance and federal government guidance under the Competition Act. Registered CTPs are subject to such CSA and federal government guidance by virtue of their registrations.
- Coinsquare and Crypto.com are prohibited from offering staking or lending services to Canadian clients without regulatory consent. Registered CTPs are not expressly prohibited from offering staking, but all registrants other than IIROC members are prohibited from lending money, extending credit or providing margin to clients, subject to certain limited exceptions. In addition, the CTP Orders include conditions which restrict each CTP’s business activities to spot crypto asset trading and custody services, and oblige the CTP to obtain regulatory approval for any expansion in the scope of its business activities.
See: A Global Review Of The Regulatory Considerations Relating To Crypto-Asset Trading Platforms
- Coinsquare and Crypto.com are not required to de-list a crypto asset based on a determination made by a court or securities regulator in Canada or the foreign jurisdiction with which the crypto asset has the most significant connection that the crypto asset is a security or derivative, or upon becoming aware of the view of a regulator that the crypto asset is a security or derivative. Registered CTPs have accepted this requirement as a condition of registration. However, like Registered CTPs, Coinsquare and Crypto.com may not list a crypto asset that is a security or derivative based on an internal review by the platform, or a crypto asset which is issued by or on behalf of a person or company that has been subject to an order, sanction, or administrative penalty relating to fraud, violation of anti-money laundering laws, violation of securities laws, or similar conduct in specified jurisdictions, including the United States, the United Kingdom and the member states of the European Union.
- The definition of “Specified Crypto Assets” in the undertakings includes Bitcoin, Ether, Litecoin, Bitcoin Cash and any other Crypto Asset that has been designated in writing by the CSA as a Specific Crypto Asset for the purposes of the undertaking [paraphrase]. In all jurisdictions other than Alberta, British Columbia, Manitoba and Quebec (the “Investment Limit Jurisdictions”), Registered CTPs that are exempt from the suitability obligation may sell a maximum of C$30,000 worth of crypto assets other than Specified Crypto Assets to a client in any 12 month period.
- In the Investment Limit Jurisdictions, Coinsquare’s undertaking limits a client’s investments in crypto assets other than Specified Crypto Assets in any 12 month period to C$30,000 for clients that do not qualify as “eligible crypto investors”, C$100,000 for clients that qualify as “eligible crypto investors” and unlimited for clients that qualify as “accredited crypto investors”.
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The National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org
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The OCC is Facing Calls to Pull Guidance That Allows Banks to Do Some Crypto Business
Protocol | Brian Deffenbaugh | Aug 11, 2022
A group of progressive senators including Elizabeth Warren and Bernie Sanders are calling on a federal banking regulator to pull Trump-era guidance that gives banks limited clearance to engage in crypto-related business.
In a Wednesday letter addressed to the Office of the Comptroller of the Currency, the senators pushed forward an ongoing debate over the role banks should play in the crypto ecosystem. Banking industry groups say the regulated institutions can bring stability to the volatile sector. But the lawmakers fear crypto could introduce systemic risk to the broader banking system without strict guardrails.
See: BIS Limits Banks to Hold 1% of Reserves in Bitcoin –> “Banks Won’t HOLDL”
The OCC's current guidance was published in late 2020 and early 2021. It gives federally chartered banks clearance to provide crypto custody service, hold cash reserves backing stablecoins and use blockchain technology and stablecoins to verify bank-to-bank payments.
Inaction vs. limitation
A banking industry trade group recently argued that limiting banks’ participation in crypto is counterproductive to protecting consumers. A Monday letter from the American Bankers Association to the Treasury Department noted banks are facing restrictions that mostly keep them out of digital assets, while there is still little regulation for non-banks involved in crypto.
Brooke Ybarra, senior VP of innovation and strategy, American Bankers Assocation:
The combination of these two approaches — inaction on the one hand to bring into the regulatory perimeter non-bank crypto companies, and limitation on the other of banks’ ability to engage responsibly in the digital asset market — creates an environment that makes it nearly impossible for responsible financial innovation to occur in this space.
Next
The senators’ letter calls on the OCC to take up a new process with the Federal Deposit Insurance Corp. and Federal Reserve to clarify how the banks they oversee can engage with crypto. The letter also includes a series of questions about how many OCC-regulated banks are engaging in crypto activities.
See: How the Big Five Banks Control Canada’s Payment Systems
The OCC, FDIC and Federal Reserve released a joint statement late last year promising further clarity would come for banks on crypto in 2022 — but guidance since then has been limited. The FDIC recently put out a statement warning banks they must monitor how the crypto firms they partner with advertise the availability of deposit insurance. That concern, plus Warren and Sanders’ attention, could be a signal of additional action coming.
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The National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org
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Analysis: Into the Eye of a Tornado | Sanctions Compliance Best Practices for Crypto Businesses
TRM Labs | Aug 8, 2022
Key insights
- The U.S. Treasury Department’s Office of Foreign Asset Control (OFAC) sanctioned Ethereum-based cryptocurrency mixer Tornado Cash, which has been used by North Korean cyber-criminals and other threat actors to launder the proceeds of hacks and other illicit activity
- Tornado Cash is a favorite money laundering tool for North Korean cybercriminals who, according to analysis by TRM Labs, have used the mixer to launder stolen funds in ten of their most recent crypto heists at an estimated value of nearly $1 billion, including in the $620 million Ronin Bridge hack
- Tornado Cash has been central to many other large cryptocurrency heists
- The U.S. government has been targeting mixers that launder proceeds of hacks and illicit activity — blender.io, Helix and Bitcoin Fog
See: Tornado Cash Virtual Currency Mixer Sanctioned by the U.S.
- As a result of today’s action, all property and interests in property of Tornado Cash in the U.S. is blocked and U.S. persons or entities may not transact with Tornado Cash or sanctioned persons
OFAC expects crypto businesses to follow best practices to mitigate the risk of sanctions’ exposure
In October 2021, OFAC issued guidance to cryptocurrency businesses. The guidance focuses on best practices for crypto businesses setting out five essential components of a compliance program including (1) management commitment, (2) risk assessment, (3) internal controls, (4) testing and auditing, and (5) training. These best practices become more important than ever when you are dealing with a designated entity the size of Tornado Cash.
OFAC outlines how crypto businesses should tailor their sanctions’ compliance programs to meet their own unique risk-based approach. Under the third category of internal controls OFAC provides additional guidance on the use of blockchain intelligence and other risk mitigation measures including:
- Transaction Monitoring and Investigation. According to OFAC, transaction monitoring and investigation software should be to identify transactions involving virtual currency wallet addresses associated with sanctioned individuals or entities located in sanctioned jurisdictions. Crypto businesses should also employ transaction monitoring and investigation tools to continually review historical information for such addresses or other identifying information to better understand their exposure to sanctions risks and identify sanctions compliance program deficiencies.
See: Federal Reserve: Crypto and DeFi Insights from Recent Turbulence Through a Financial Stability Lens
- Geolocation Tools. OFAC makes clear that it expects the use of geolocation tools and IP address blocking tools in order to ensure that a business is not transacting with sanctioned jurisdictions.
- Screen Relevant Data. OFAC expects that companies will screen customer and transactional data available to them against the SDN list and account for updates to user information.
- Know-Your-Customer Procedures. OFAC expects businesses to obtain KYC information from customers during onboarding and throughout the lifecycle of the customer relationship and use this information to conduct due diligence sufficient to mitigate the customer’s potential sanctions-related risk. Heightened due diligence, including examining customer transactional history, should be implemented for higher risks customers.
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The National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org
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Post-Merge Will Ether Be Closer to a Security?
Coindesk | Frederick Munawa | Aug 10, 2022
A Georgetown Law professor sounds an alarm on how proof-of-stake makes it easier for ether to meet the Howey Test.
Ethereum’s upcoming Merge (Expected to be complete by October) could make the second-largest blockchain greener, faster and cheaper. But a law professor says it could also create regulatory headaches by transforming ether (ETH), the network’s native asset, into a security under U.S. law.
https://twitter.com/AdamLevitin/status/1550990967670554624?ref_src=twsrc%5Etfw%7Ctwcamp%5Etweetembed%7Ctwterm%5E1550990967670554624%7Ctwgr%5Ecb110666d1480c93d4f9d0786e8ce158aecb91cb%7Ctwcon%5Es1_c10&ref_url=https%3A%2F%2Fwww.coindesk.com%2Ftech%2F2022%2F08%2F10%2Fwhats-at-stake-will-the-merge-turn-ether-into-a-security%2F
See: Vitalik: Ethereum creator dumps cold water on Zuckerberg and Michael Saylor
Levitin’s argument is anchored in the Howey Test – detailed in a 1946 U.S. Supreme Court ruling often used to determine whether an asset is a security. To fully appreciate Levitin’s perspective, it’s important to understand Howey and the concept of staking in a proof-of-stake system.
A world where ETH is a security
If Levitin is right, and, more importantly, if the U.S. Securities and Exchange Commission (SEC) shares his view, exchanges that list ether (and that would be nearly all of them) would be subject to more onerous regulatory requirements. Like the bitcoin (BTC) cryptocurrency, ether has until now been treated as a commodity, outside the SEC’s jurisdiction.
Essentially, smaller decentralized finance (DeFi) projects, especially those outside the United States, may continue to operate. Even if these projects run afoul of U.S. securities laws, Levitin said the SEC would be less likely to deploy its limited enforcement resources to convict them when big centralized organizations make easier targets.
See: Coinbase Responds to New SEC Securities Listing Probe
The biggest change may be in the regulation of centralized exchanges. Currently, exchanges need only to register as money services businesses at the federal level and obtain money transmitter licenses in the states where they operate to facilitate spot ETH trading. A securities designation would bring them under the additional authority of the SEC.
At a minimum, that would mean new business models for exchanges and more complex transactions for customers. Many other downstream effects would likely manifest.
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The National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org
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