Understand What "Net Acquisition Limit" Is & Which Provinces are Affected By The Limit

September 29, 2021 was a historic day for us at Netcoins. It’s the day we became the first publicly-owned, fully regulated crypto trading platform in Canada!

Though a few months have passed since then, some of you are wondering what regulation continues to mean for you (as a Netcoins user) and whether it will have a significant impact on your trading activities.

To clarify, most of the demands that stem from regulation will impact Netcoins’ behind-the-scenes operations to help create a safer trading experience for you.

There is however, a small caveat that customers should be aware of as it could potentially impact them - and that is a new limit on net acquisitions of certain coins within certain provinces. Not to worry, we’ll go over it in this article.

Aside from that, regulation simply means we must meet all the regulatory requirements from the government and adhere to stricter guidelines. This is a big step towards more consumer protection; something we take very seriously - and celebrate - here at Netcoins.

What does regulation mean for Netcoins customers?

Netcoins customers across Canada can continue to buy Bitcoin, Ether and a whole suite of other cryptocurrencies without restrictions. That will not change. However, when it comes to

select crypto assets

there will be certain limits that will be enforced depending on the province a user resides in.

A select crypto asset is a crypto asset that is not Bitcoin, Ether, Bitcoin Cash or Litecoin. As an example, XRP or DOGE would be considered select crypto assets. Any other future cryptocurrency Netcoins adds to the platform will also be considered a select crypto asset unless stated otherwise.

Provinces that have no limits.

For the following provinces, there will be no limits on purchases made for Bitcoin, Ether, Bitcoin Cash, Litecoin

or

select crypto assets.

Alberta

British Columbia

Manitoba

Québec

Put another way, if you live in Alberta, British Columbia, Manitoba or Québec, you can continue to purchase the crypto assets offered on the Netcoins platform without any new limitations.

Provinces that have limits.

Users that reside in the following provinces will have a $30,000 CAD limit in net acquisitions (or cumulative total) for all select crypto assets:

Ontario

New Brunswick

Newfoundland

Labrador

Northwest Territories

Nova Scotia

Nunavut

Prince Edward Island

Saskatchewan

Yukon

It’s important to clarify that the

$30,000 CAD limit in net acquisitions applies to the select crypto assets on a cumulative basis,

and not on an individual basis.

This means that if Netcoins has 3 different select crypto assets (let’s call them Coin A, B & C), the $30,000 limit is shared amongst all three coins. You could buy $10,000 worth of Coin A, $15,000 of Coin B and $5,000 of Coin C at the same time because then your net acquisition for these select crypto assets comes to a total of $30,000.

Another important factor to keep in mind is that the $30,000 limit applies to cumulative purchases made for select crypto assets

throughout a 12-month period,

and not on how much value they have gained.

Here are a few, additional examples to help shed more light on the new limits:

Example 1)

You buy $30,000 worth of XRP over a 12-month period. The value rises to $40,000 so you decide to sell $10,000. Your net acquisition now equals $20,000, which means you can still buy another $10,000 worth of XRP.

Example 2)

You buy $30,000 worth of XRP and then sell $40,000. Your net acquisition is now $0 so you can go ahead and buy an additional $30,000 worth of XRP.

Example 3)

You buy $20,000 worth of XRP today, and next month it’s worth $40,000 CAD. You are still allowed to buy another $10,000 worth of XRP.

Example 4)

You buy $25,000 worth of XRP and want to buy $10,000 worth of SHIB. This is not allowed because your net acquisition would equal $35,000, exceeding the limit of $30,000.

Example 5)

You transfer $20,000 worth of AVAX into Netcoins. Your net acquisition on select crypto assets (assuming you don’t own any of the other select cryptocurrencies on Netcoins) is still 0 as you did not make that purchase on Netcoins. You can still purchase $30,000 worth of select crypto assets.

Finally, users that reside in the 10 provinces listed above will still be able to make unlimited purchases of Bitcoin, Ether, Bitcoin Cash or Litecoin.

We hope that by now you understand what we mean when we say there is a "

limit of $30,000 on net acquisition for select crypto assets"

, and understand which of the Canadian provinces will be impacted by this limit. Other than that, your crypto trading experience with Netcoins remains largely the same. If things change from our end (as a result of regulatory updates), rest assured we’ll let you know.

The fact we are a fully regulated crypto trading platform, with more governmental oversight of our business, the operations and the overall infrastructure should give you, our valued customer, more confidence in the Netcoins platform and in us as a business. After all, we’re about making crypto easy to buy, sell and understand in a safe and regulated environment.

Thank you for choosing us as your trusted partner in your crypto journey.

Email us at

support@netcoins.caif you have any questions.