Announcement: Thursday November 25th 2021, Suitability Update

We’re going through a transitional period here at Coinberry following the regulatory approval made by the Ontario Securities Commission. To continue making Coinberry safer for users, we will be updating our suitability requirements. 

Both new and existing clients will need to complete the suitability questionnaire. The result of the questionnaire  will introduce new net acquisition limits appropriate to the type of investor. 

This means that the total buying or selling behaviour within a 12-month period cannot exceed an investor’s defined limit. 

We answer some questions below:

Q: Does this relate to all coins? 

The high-value, most well-recognized coins will not be included in the calculations nor subject to the limit. This list includes Bitcoin, Litecoin, Ethereum, and Bitcoin Cash, commonly referred to as “specified crypto assets”. 

All other altcoins will be subject to net acquisition limits. Examples include Dogecoin, Polkadot and Cardano, commonly referred to as “non-specified crypto assets”.

Q: Why is this happening?

These limits are being imposed to assist with aligning exposure with risk tolerance. 

The notion of an accredited investor allows access for investors who are financially equipped to absorb the risk, and knowledgeable and experienced enough to grasp it, to invest at levels beyond those who are not.

In recent months, we have seen the rise of many different coins that have turned out to be scams which resulted in investors losing their entire investment. Even though we perform our own due diligence on every coin we support on our platform, we have to accept that there are still some risks, despite our best efforts. This will protect against this type of behaviour in a broad, industry-wide sense.

Q: How is it calculated?

The regulatory requirement posed by our registration includes a three-tiered investment structure.

Limitations:

  • CAD $30,000 of non-specified crypto assets for non-accredited crypto investors. (No limits on BTC, LTC, BCH, ETH)
  • CAD $100,000 of non-specified crypto assets for eligible crypto investors. (No limits on BTC, LTC, BCH, ETH)
  • Unlimited amount of non-specified crypto assets for accredited crypto investors. 

Non-accredited or eligible crypto investors are limited to net buy CAD $30,000 worth of non-specified crypto assets per year. For example, if you buy CAD $1,000 of non-specified crypto assets (i.e. XLM) on November 25th, and then sell CAD $500 of XLM on November 26th, then throughout the year you are able to buy an additional CAD $29,500 of any other non-specified crypto asset (CAD $30,000 – CAD $1,000 + CAD $500 = CAD $29,500).

Eligible crypto investors at Coinberry are limited to net buy CAD $100,000 worth of non-specified crypto assets. These investors are defined as having CAD $400,000 in assets and an income of CAD $75,000, or CAD $125,000 shared with a spouse.

Finally, there are no limits on accredited crypto investors, which are defined as clients with CAD $1 million in financial assets, annual pre-tax net income of CAD $200,000 (CAD $300,000 with a spouse), or CAD $5 million total assets.

Q: What is the Benefit?

The benefit from a wider industry perspective ultimately is in harm mitigation. 

Fewer people are going to get bilked out of their life savings by unsavoury people on the internet selling high-risk coins. The end result will be a cryptocurrency trading industry earmarked by compassion, trust, and understanding rather than one that’s blanketed in risk and where graft and avarice are constant threats.

From Coinberry’s perspective, it’s getting out ahead of the regulation rather than playing catch-up later, showing ourselves as a leader in the space. We have always been strong in terms of self-regulation and safety—adhering to best practices that put our customers’ best interests in mind, and this only serves to bolster our aims in this direction.

Q: How is the industry going to be affected?

The industry will become more moderate in terms of risks and rewards. Investors of all ages will be protected from scams, fraudulent alt-coins, and investing more than they can afford to lose. The type of investor a place like Coinberry will attract (and when this is pushed out to all Canadian platforms —them too) will become more moderate as well. 

Trading will become more widely accepted, facilitating greater cryptocurrency adoption, as regulations in place will draw more than just curious appeal from a broad base of potential investors who may have been scared away by the wild west aspect of an unregulated market.

Should you have any further questions about the suitability requirements please do not hesitate to contact us at support@coinberry.com.