{"id":47786,"date":"2023-05-06T17:02:25","date_gmt":"2023-05-06T22:02:25","guid":{"rendered":"https:\/\/www.escapeartist.com\/?p=47786"},"modified":"2023-05-06T17:08:19","modified_gmt":"2023-05-06T22:08:19","slug":"a-canadians-misadventures-in-crypto","status":"publish","type":"post","link":"https:\/\/www.escapeartist.com\/blog\/a-canadians-misadventures-in-crypto\/","title":{"rendered":"A Canadian\u2019s (Mis)adventures in Crypto"},"content":{"rendered":"

I\u2019ve dabbled in a few different types of investment vehicles in my life, but crypto has never been one of them. It always felt like a mystery to me and I\u2019ve mainly tried to focus on the types of investments I have a better understanding of. But a friend of mine had been investing in crypto for awhile and was getting great returns, so I thought I would give it a try.\u00a0<\/span><\/p>\n

Keep in mind, I am from Canada \u2013 the land of frozen bank accounts, government overreach and massive inflation. The Canadian Dollar is not looking like a great investment at the moment, even against other currencies facing inflationary pressures, such as the US Dollar. So I was very interested in the concept of moving some money from fiat currency into a decentralized crypto currency. Could this be a way for us to be less beholden to the Canadian Dollar system?<\/span><\/p>\n

Roadblocks ahead<\/strong><\/h2>\n

The process of just getting our money from Point A to Point B was daunting. The first task was to wire transfer our money from one of the \u201cBig 5\u201d banks here in Canada to the cryptocurrency platform in the US. Unfortunately, some banks were now refusing to complete these wire transfers for people, stating concerns about fraud. Many other potential investors had been trying to transfer money for several weeks without being able to get past their bank\u2019s gatekeepers.<\/span><\/p>\n

Our bank actually ended up being pretty good. While the teller was hesitant to grant my transfer, regaling me with tales of someone she knew who had lost $500K to \u201cone of these things\u201d she put it through and I did not have any issues on my bank\u2019s side. This is the part I was most nervous about after hearing of other people having issues, so I thought I was in the clear once we made it past this part.<\/span><\/p>\n

But, unfortunately, we were not out of the woods yet. Now we had to wait for the cryptocurrency platform to do their part and get our money into the account on their end. This ended up taking around 5 days due to some administrative issues but finally I received an email confirming the money was in our account and a pleasant \u201cHappy Trading!\u201d message to boot. We were finally out of the woods and ready to get this show on the road!<\/span><\/p>\n

Except, of course, we weren\u2019t. Because, here in Canada, we like to make things difficult.<\/span><\/p>\n

Are you freaking kidding me?<\/strong><\/h2>\n

I really can\u2019t title this section anything else because what other reaction can a person have when events play out this way?<\/span><\/p>\n

I swear to you, Dear Reader, that not two minutes after I received this email from the cryptocurrency platform with the very clear \u201cHappy Trading!\u201d message stating I was good to go, my friend called me in a bit of a panic. She had received an email from this exact platform \u2013 the one that literally just accepted my money and charged me a fee for the pleasure \u2013 saying they could no longer support Canadians and that we had until May 21 to get our money off the platform. Transferring to another exchange was not allowed; the money had to be sent back to a bank.<\/span><\/p>\n

I was shocked and thought there must be a mistake \u2013 why would they accept my money knowing I was Canadian and would not be allowed to do anything? Immediately, we knew the Canadian government had its grubby hands in this somehow. And this was confirmed when we spoke to a representative from the platform who said it was due to the new regulations and red tape our government was imposing.<\/span><\/p>\n

Had this happened the day before, our wire transfer would have been bounced back to us, no harm, no foul. Had it happened a day later, we would have had time to transfer our USD into USDT (a stable coin linked to the value of the USD) and get it off this platform and into a Tron wallet to move forward with the purchase of our crypto investment.<\/span><\/p>\n

Instead, we ended up in a limbo zone where we needed to set up a transfer back to our bank. Not wanting to be forced to convert our USD back to CAD, we are having some extra administrative hassle that is prolonging the process. We should have the money back shortly but COME ON.<\/span><\/p>\n

Was this divine intervention? Did the stars perfectly align to prevent us from making this investment? It would almost seem so, wouldn\u2019t it?<\/span><\/p>\n

Or, could it just be the Canadian government getting overly involved in our affairs yet again?\u00a0<\/span><\/p>\n

Perhaps it is a bit of both.<\/span><\/p>\n

So, what actually happened?<\/strong><\/h2>\n

It turns out that back in 2021 Canada made the following changes to the regulations around cryptocurrency platforms:<\/span><\/p>\n

    \n
  1. New KYC and AML rules: KYC (Know Your Customer) and AML (Anti-Money Laundering) regulations are pretty standard when dealing in securities in Canada. Essentially, they assist in identity verification and fraud prevention and suspicious transactions must be reported to FINTRAC (Financial Transaction and Reports Analysis Centre of Canada). Crypto platforms did not previously need to follow these requirements.<\/span><\/li>\n
  2. New licensing rules: Crypto platforms must register with FINTRAC as Money Services Businesses (MSBs), meaning they have to meet specific regulatory requirements such as reporting large transactions and maintaining transactions records.<\/span><\/li>\n
  3. Proposed tax changes: The proposed tax rules meant that businesses receiving payment in cryptocurrency needed to report transactions and the value of cryptocurrency received as income. Additionally, crypto held in a personal account would be subject to capital gains tax when sold or exchanged.<\/span><\/li>\n<\/ol>\n

    Clearly cryptocurrency, once considered the wild west of investing, is becoming regulated much like other securities in Canada. On its surface, this isn\u2019t necessarily a bad thing. These new rules aren\u2019t anything too crazy and are actually pretty standard Canadian fare.<\/span><\/p>\n

    But even though some of this oversight is certainly beneficial, does anyone really believe this is for our benefit? Or is it just more government control?<\/span><\/p>\n

    Anyway, while these new rules were put in place in 2021, they really weren\u2019t being enforced very strictly. Between transition periods and a time-consuming registration period with FINTRAC, it didn\u2019t seem like the regulators were in a rush to push this through. Plus, you know, there was a \u201cpandemic\u201d going on and what not.<\/span><\/p>\n

    \u201cEnhanced Expectations\u201d for your safety<\/strong><\/h2>\n

    Enter the FTX collapse in late 2022. This sent Canadian regulators into a tizzy and this is when the 2021 rules finally got some teeth.<\/span><\/p>\n

    Along with committing to aggressive enforcement of the previously mentioned regulations, they now also had some new rules \u2013 referred to as \u201cenhanced expectations\u201d \u2013 pertaining to the functionality of the platforms.<\/span><\/p>\n

    These \u201cenhanced expectations\u201d included the following:<\/span><\/p>\n

      \n
    1. Keeping Canadians\u2019 cryptocurrency separate from the company\u2019s own money, essentially holding funds in trust so that if the platform were to collapse, Canadians\u2019 funds would be safe.<\/span><\/li>\n
    2. Not allowing customers to \u201ctrade on margin\u201d or offering any types of debt or borrowing.<\/span><\/li>\n
    3. No longer able to offer stablecoins \u2013 a cryptocurrency pegged to the value of a fiat currency \u2013 unless they get specific permission from regulators. In my opinion, this requirement was put in place to make it easier to track capital gains for taxation purposes.<\/span><\/li>\n<\/ol>\n

      The hammer drops<\/strong><\/h2>\n

      In February 2023, Canadian regulators announced any crypto platforms that wanted to continue to serve Canadians had only 30 days to provide an official \u201cpre-registration undertaking\u201d showing they were working to comply with these new regulations. Any platforms that did not move forward with the new rules were instructed to wind down their Canadian clients\u2019 accounts and block Canadians from their platforms.\u00a0<\/span><\/p>\n

      And this is why I was unable to move forward with my trades on that particular cryptocurrency platform. It has been a super frustrating experience but one I will definitely learn from. And it just further drives home the point that our government is making it more difficult to do business and invest in Canada.\u00a0<\/span><\/p>\n

      Now, I am clearly not a crypto currency expert, I\u2019m just sharing my experience and what I learned about the regulatory environment around crypto here in Canada through this debacle. There are tons of crypto platforms and while some of them are bowing out of Canada due to the regulatory environment, there are certainly some that are staying. So, all is not lost if you are a Canadian attempting to invest in crypto. But definitely do your research first and make sure you understand what your best path forward looks like amid the turbulent conditions.\u00a0<\/span><\/p>\n

      Find crypto intimidating? Check out these amazing resources!<\/strong><\/h2>\n

      Escape Artist has a ton of great crypto articles to help you better understand crypto. Make sure you go check them out <\/span>here<\/span><\/a>!<\/span><\/p>\n

      We also have tons of interviews with our crypto expert, Eryka Gemma, on our YouTube channel. Check those out <\/span>here<\/span><\/a>!<\/span><\/p>\n

      Finally, you do not want to miss out on the premium content we feature every month in <\/span>Escape Artist Insiders <\/span><\/i>magazine! Get valuable information about crypto and tons of other exciting topics from our expert insiders delivered right to your inbox. <\/span>Subscribe here<\/span><\/a> and become an Insider today!<\/span><\/p>\n","protected":false},"excerpt":{"rendered":"

      I\u2019ve dabbled in a few different types of investment vehicles in my life, but crypto has never been one of them. It always felt like a mystery to me and I\u2019ve mainly tried to focus on the types of investments I have a better understanding of. But a friend of mine had been investing in […]<\/p>\n","protected":false},"author":705,"featured_media":47789,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"content-type":"","om_disable_all_campaigns":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[35774],"tags":[],"yst_prominent_words":[5096,11290,21205,37221,1795,6781,38510,1808,38509,38511,5365,38515,1960,38514,12737,26232,38516,38512,38513,6868],"acf":[],"jetpack_sharing_enabled":true,"jetpack_featured_media_url":"https:\/\/www.escapeartist.com\/wp-content\/uploads\/2023\/05\/Charlie-Brown-pic-1.jpg","_links":{"self":[{"href":"https:\/\/www.escapeartist.com\/wp-json\/wp\/v2\/posts\/47786"}],"collection":[{"href":"https:\/\/www.escapeartist.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.escapeartist.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.escapeartist.com\/wp-json\/wp\/v2\/users\/705"}],"replies":[{"embeddable":true,"href":"https:\/\/www.escapeartist.com\/wp-json\/wp\/v2\/comments?post=47786"}],"version-history":[{"count":1,"href":"https:\/\/www.escapeartist.com\/wp-json\/wp\/v2\/posts\/47786\/revisions"}],"predecessor-version":[{"id":47788,"href":"https:\/\/www.escapeartist.com\/wp-json\/wp\/v2\/posts\/47786\/revisions\/47788"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.escapeartist.com\/wp-json\/wp\/v2\/media\/47789"}],"wp:attachment":[{"href":"https:\/\/www.escapeartist.com\/wp-json\/wp\/v2\/media?parent=47786"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.escapeartist.com\/wp-json\/wp\/v2\/categories?post=47786"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.escapeartist.com\/wp-json\/wp\/v2\/tags?post=47786"},{"taxonomy":"yst_prominent_words","embeddable":true,"href":"https:\/\/www.escapeartist.com\/wp-json\/wp\/v2\/yst_prominent_words?post=47786"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}