On this page:
Terminology | What are investment limits? | Who is affected by investment limits?
Basic Investment Limits | How are investment limits calculated? | When do investment limits reset?
What actions affect my remaining investment limit? | Investment limit examples
Terminology
- “Accredited Crypto Investor” and “Eligible Crypto Investor” have specific meanings ascribed to them based on this OSC decision.
- “Retail Crypto Investor” means a client that is not an Eligible or Accredited Crypto Investor.
- “Restricted Assets” means digital assets available on Bitbuy, except Specified Assets.
- “Specified Assets” means Bitcoin, Bitcoin Cash, Ethereum and/or Litecoin.
- “Fiat currency” refers to Canadian Dollars (CAD) and US Dollars (USD) but NOT Value-Referenced Crypto Assets (VRCAs), commonly known as “stablecoins*”, such as USD Coin (USDC) or Dai.
*Although the term “stablecoin” is commonly used, there is no guarantee that the asset will maintain a stable value in relation to the value of the reference asset when traded on secondary markets or that the reserve of assets, if there is one, will be adequate to satisfy all redemptions.
What are investment limits?
Investment limits are maximum amounts of certain crypto assets that can be purchased by investors, depending on their investor category. Bitbuy is required to assign each Retail Crypto Investor and Eligible Crypto Investor with an investment limit based on their financial circumstances, as a regulatory requirement imposed by the Canadian Securities Administrators.
The investment limit represents the maximum amount of all combined crypto assets that an investor can purchase in a 365-day period, except Bitcoin, Bitcoin Cash, Ethereum and Litecoin, which are not subject to investment limits. All investors, regardless of category, can purchase an unlimited amount of Bitcoin, Bitcoin Cash, Ethereum and/or Litecoin. These four assets are referred to collectively as “Specified Assets”.
For all other assets besides Specified Assets, the Investment Limits per 365-day period are:
- Retail Crypto Investors: $30,000 CAD
- Eligible Crypto Investors: $100,000 CAD
- Accredited Crypto Investors: No limit.
Who is affected by Investment Limits?
Clients who are residents of Quebec, Manitoba, Alberta, or British Columbia are exempt from any Investment Limits, regardless of their financial circumstances.
Residents of all other provinces and territories who are determined to be Retail Crypto Investors or Eligible Crypto Investors are subject to the Investment Limits.
Basic Investment Limits
Specific clients may be found to be in a new category of appropriateness, which allows these clients to enter our platform with a basic investment limit of $5000. This limit applies to any client who fits the necessary criteria, regardless of their province of residence. While the standard investment limits do not consider specified crypto assets (BTC, ETH, LTC, and BCH), basic investment limits do not have any special consideration, which means that any purchases of any crypto asset will contribute to the $5000 annual net purchase limit.
Clients who are assigned a basic investment limit and who wish to upgrade to one of our standard investment limit tiers may contact support if they feel that their answers to the trading questionnaire have changed since they last completed it.
How are Investment Limits calculated?
Clients who are subject to Investment Limits will see their remaining limit displayed on their account profile. This limit is calculated using the formula below.
In this formula, “Restricted Asset” means any of the currencies that are not Specified Assets. Fiat means Canadian Dollars (CAD) or US Dollars (USD) but not Value-Referenced Crypto Assets (VRCAs), commonly known as “stablecoins”* such as USD Coin.
Remaining Investment Limit
=
Investment Limit ($30k or $100k)
-
total CAD value of all purchases and/or open buy orders where a Restricted Asset is acquired by selling a Specified Asset or fiat
+
total CAD value of all sales where a Specified Asset or fiat is acquired by selling a Restricted Asset.
To put it simply, buying Restricted Assets using fiat or Specified Assets reduces your Investment Limit. Selling Restricted Assets for fiat or for Specified Assets increases your Investment Limit room. Trading one Restricted Asset for another Restricted Asset has no effect on your Investment Limit.
*Although the term “stablecoin” is commonly used, there is no guarantee that the asset will maintain a stable value in relation to the value of the reference asset when traded on secondary markets or that the reserve of assets, if there is one, will be adequate to satisfy all redemptions.
When do Investment Limits reset?
Investment Limits for each client consider all transactions that have taken place in the previous 365 day period on a rolling basis. Any transactions conducted before November 12th, 2022 will not be considered in the calculation. Each Bitbuy client will have a full Investment Limit balance on November 12th, regardless of historical transactions.
What actions affect my remaining investment limit?
Deposits
The act of making a deposit, either in fiat currency, a Specified Asset or a Restricted Asset does not affect investment limits in any way.
Withdrawals
The act of making a withdrawal, either in Canadian Dollars, a Specified Asset or a Restricted Asset does not affect investment limits in any way.
Trades
Trades do affect investment limits under the following circumstances:
Buying Restricted Assets
The purchase of a Restricted Asset reduces the client’s remaining investment limit, if the purchase is being made using fiat currency or a Specified Asset.
For example, a $5,000 purchase of Chainlink (LINK), a Restricted Asset, using Canadian Dollars will reduce an investor’s investment limit balance by $5,000.
A purchase of $4,000 of Apecoin (APE), a Restricted Asset, using Bitcoin as the asset sold to purchase APE, will reduce the investor’s investment limit balance by $4,000.
Buying Specified Assets
Purchases of Specified Assets do not affect a client’s remaining investment limit. Clients can purchase unlimited amounts of Specified Assets.
For example, buying $40,000 in Bitcoin, a Specified Asset, has no effect on an investor’s investment limit balance, even if the client is a Retail Crypto Investor who is assigned an investment limit of $30,000.
Selling a Restricted Asset to Fiat or a Specified Asset
Selling Restricted Assets to obtain a fiat currency (CAD or USD), or Specified Assets like Bitcoin, have the effect of unlocking investment limit room. When a Restricted Asset is sold, the investment limit balance taken up by that purchase is reset, so investors will see their investment limit balance increase.
For example, selling $8,000 CAD-value worth of ApeCoin, a Restricted Asset, in exchange for Bitcoin, a Specified Asset, will open up $8,000 CAD in investment limit balance.
For greater certainty, regardless of the number of transactions completed that have the effect of increasing an investment limit balance, an investment limit balance will never exceed the total allowable investment limit assigned to each investor category.
Trading a Restricted Asset for Another Restricted Asset
Buying one Restricted Asset by selling another has no effect on investment limits.
For example, a single coin-to-coin trade selling $5,000 worth of DOGE to purchase $5,000 worth of SHIB, both of which are Restricted Assets, has no effect on the investor's remaining investment limit.
This appendix shows the effect of each potential action on the remaining investment room. The below examples are for demonstrative purposes only and do not reflect the actual value of the assets specified.
|
Action |
Example |
Effect |
|
Deposit Canadian Dollars |
e-Transfer deposit of $1,000 CAD |
No Effect. |
|
Deposit Specified Asset |
Deposit 0.10 Bitcoin (BTC) |
No Effect. |
|
Deposit Restricted Asset |
Deposit 100 Dogecoin (DOGE) |
No Effect. |
|
Withdraw Canadian Dollars |
EFT Withdrawal of $5,000 CAD |
No Effect. |
|
Withdraw Specified Asset |
Withdraw 0.10 Bitcoin (BTC) |
No Effect. |
|
Withdraw Restricted Asset |
Withdraw 100 Dogecoin (DOGE) |
No Effect. |
|
Buy Specified Asset With CAD (i.e. CAD → BTC) |
Trade $100 CAD for 0.001 Bitcoin |
No Effect. |
|
Buy Restricted Asset with CAD (i.e. CAD —> DOGE) |
Trade $100 CAD for 1,000 Dogecoins. |
Reduces investment limit balance by the amount of the purchase. |
|
Buy Restricted Asset with Specified Asset |
Trade 0.1 Bitcoin for 15,000 Dogecoins |
Reduces investment limit balance by the CAD-value amount of the purchase. |
|
Trade Specified Asset for Specified Asset |
Trade 0.1 Bitcoin for 0.5 Ethereum |
No effect. |
|
Trade Restricted Asset for Restricted Asset |
Trade 1,000 Dogecoins for 500,000 Shiba Inu |
No effect. |
|
Sell Restricted Asset to Canadian Dollars |
Sell 1,000 Dogecoins for $100 CAD |
Increases investment limit balance by the amount sold. |
|
Sell Restricted Asset to Specified Asset |
Sell 1,000 Dogecoins for 0.2 Ethereum |
Increases investment limit balance by the CAD-value amount sold. |
Investment Limit examples
Case 1:
Alex opens a new account on December 1, 2022 and, as a Retail Crypto Investor, has an Investment Limit of $30,000. They deposit $1000 CAD into their account and immediately purchase $1000 worth of Bitcoin. Since Bitcoin is a Specified Asset and was acquired for fiat, this trade has no effect on Alex’s Investment Limit calculation.
On January 3, 2023, Alex’s Bitcoin has now doubled in value and is worth $2000 CAD. Alex trades their entire bitcoin holdings to ApeCoin. This trade has an effect on Alex’s Investment Limit, since a Restricted Asset (APE) is purchased using a Specified Asset. Following this trade, Alex’s remaining acquisition room is now $28,000, as $2000 of their available Investment Limit is occupied by the APE-BTC transaction.
Two months later, Alex deposits $3000 worth of MATIC into their account. Since deposits and withdrawals are not considered in the Investment Limit calculation, this has no effect on Alex’s remaining acquisition room.
In June 2023, Alex’s MATIC holdings are now worth $5000, and their APE holdings are worth $2000. Alex decides to trade all of their APE to MATIC in a coin-to-coin trade, without converting to CAD first. Since this trade includes the acquisition of a Restricted Asset for another Restricted Asset, it is not considered in the Investment Limit calculation. After this trade, Alex’s remaining acquisition room is still $28,000.
In September 2023, Alex’s MATIC holdings are now worth $8500. Alex deposits $5000 CAD into their account and trades the entirety of that CAD balance to MATIC. Since this trade is an acquisition of a Restricted Asset for fiat, it is considered in the Investment Limit calculation. This trade removes $5000 from Alex’s remaining Investment Limit, reducing his acquisition room to $23,000.
In November 2023, Alex’ MATIC holdings are now worth $15,500. They decide to liquidate $6000 worth of MATIC to CAD. This trade is a sale of Restricted Assets to fiat, which is considered in the Investment Limit calculation, and opens up additional Investment Limit acquisition space. This trade causes Alex’ remaining Investment Limit acquisition room to increase by $6,000 to $29,000 total.
On January 4, 2024, more than 365 days have passed since Alex’ trade where they traded $2000 worth of Bitcoin for ApeCoin. Since this trade occurred more than 365 days ago, it is no longer considered in the Investment Limit calculation. That trade, worth $2000, no longer affects Alex’s remaining acquisition room, therefore their limit is restored to $30,000. It cannot be restored above $30,000 because that is the maximum permitted Investment Limit for a Retail Crypto Investor.
Case 2:
Ash is an existing Bitbuy user, who has had an account since 2020. In November 2022, Bitbuy enabled Investment Limits and required Ash to complete the trading questionnaire. After completing the questionnaire, Ash is told they have an Investment Limit of $100,000. Ash has made numerous purchases throughout the past year, but is relieved to learn that transactions that were executed before November 12, 2022 are not considered in the Investment Limit calculation.
Ash’s account holds $60,000 CAD, which they immediately trade to USDC via Bitbuy's OTC service in December, 2022. This trade is an acquisition of a Restricted Asset for a fiat asset, which is considered in the Investment Limit calculation. This trade brings Ash’s remaining acquisition room to $40,000.
On January 1, 2023, Ash deposits USDC worth $133,000 CAD to their account. Since deposits and withdrawals are not considered in the Investment Limit calculation, this has no effect on Ash’s remaining acquisition room. At this point in time, Ash has USDC holdings worth $193,000 in their account.
Ash then trades the entirety of their USDC holdings to DOGE. Since this trade involves a Restricted Asset (USDC) being exchanged for another Restricted Asset (DOGE), it is not considered in the Investment Limit calculation. After the trade, Ash has $193,000 worth of Dogecoin, and their remaining acquisition room is still $40,000.
On June 20, 2023, Ash’ Dogecoin holdings have decreased in value to only $33,000. Ash decides to trade the entirety of their Dogecoin holdings to Bitcoin. Since this trade is an acquisition of a Specified Asset in exchange for a Restricted Asset, it is considered in the Investment Limit calculation, and increases available Investment Limit acquisition space. Since Ash’s DOGE-BTC trade had a CAD value of $33,000, and they previously had $40,000 in Investment Limits, their remaining acquisition room is now $73,000.