Is Bitbuy Legal in Canada: a Comprehensive Review

Published: May 2, 2024 | Last Updated: May 5, 2024

Markos Koemtzopoulos

Markos Koemtzopoulos is the founder and main writer of ElementalCrypto. He has been a lecturer at the University of Nicosia on cryptocurrencies and DeFi and has taught two courses on crypto and blockchain technology.

Bitbuy is one of the 13 cryptocurrency exchanges that is authorized to accept Canadian customers. The Crypto Asset Trading Platform is registered as a restricted dealer with the canadian securities administrators

In 2021, the Ontario Securities Commission issued an exemptive relief decision allowing Bitbuy Technologies Inc. to keep facilitating the trading of digital currencies such as Bitcoin, Ethereum, and others through its platform on an interim basis. 

This provides clarity that Bitbuy’s activities are permitted under Canadian securities laws.

However, the decision comes with certain conditions and is not a blanket approval. 

Bitbuy still needs to complete the transfer of all its client accounts to Coinsquare Capital Markets Ltd. (CCML), an investment dealer registered with Canadian securities regulators. Both Bitbuy and Coinsquare are owned by parent company WonderFi.

The exemptive relief grants Bitbuy time-limited exemptions from prospectus requirements when entering into contracts to trade crypto assets. It also provides exemptions from certain trade reporting rules and most marketplace rules that would otherwise apply.

To continue operating during this interim period, Bitbuy made representations about its corporate structure, registration, personnel qualifications, compliance practices, crypto asset selection process, and efforts to transition to CCML’s oversight.

While the decision confirms Bitbuy’s operations are currently legal in Canada, its future status is contingent on successfully completing the account migration to the registered dealer CCML as laid out in the decision’s terms.

Bottom line

Canadian crypto traders and investors can take comfort in knowing Bitbuy operates compliantly and within securities regulations during this transition period. However, they should also stay updated on Bitbuy’s registration status as securities rules for crypto platforms continue to evolve.

Also note that Bitbuy is also registered with The Financial Transactions and Reports Analysis Centre of Canada(FINTRAC) as a Money Services Business (MSB). Bitbuy is also in the process of seeking membership with the investment industry regulatory organization of Canada (IIROC)

Bitbuy Review

Features

Deposit and withdrawal options

  • You can deposit Canadian dollars using Interac e-transfer, wire transfer, Apple Pay, debit card, or credit card transfer
  • There is also the option to transfer your digital assets directly from another exchange or wallet
  • Deposit fees: Interac e-transfers and bank wire transfers are free of charge. If you use Apple Pay or a credit card your fee is 2.95%. If you use a debit card it’s 1.95%. 
  • Withdrawal fees: You can only withdraw to a bank account using Interac or wire transfers and the fee is a hefty 1.5%.The other alternative is to move your digital currency to another exchange and withdraw from there. See my review of the best Canadian crypto exchange here. 

Security measures

  • Bitbuy stores 90% of its crypto in cold storage which makes it a secure platform. If you plan on trading large amounts of crypto you are better off storing the in a digital wallet. 
  • Users are able to set up two-factor authentication. This is standard practice for cryptocurrency exchange platforms and makes it much harder for hackers to breach your account. 
  • Bitbuy is insured by Knox for bitcoin security hacks i.e. if your funds are stolen their insurance will cover it for bitcoin.

Trading fees

  • Fees are hefty at 2% for both makers and takers. To get them lower than that you would need to use their pro version and trade more than $250,000 worth of crypto which most readers of Elementalcrypto.com don’t have. Check out Bitbuy’s transaction fees here.
  • Staking fees are also high at 25-28% depending on the assets. This is standard practice with exchanges and you are better off staking directly with a validator using a crypto wallet. To understand staking better read my guides below:

What Does It Mean to Stake Ethereum: Best Beginner’s Guide

What Is Lido Crypto and How Is it Connected to ETH Staking?

User experience

  • Both the mobile app and website are easy to use for beginners
  • The exchange needs to comply with KYC (Know-your-customer) regulation which means that when you set up a Bitbuy account you will need to share personal information such as an email address, a phone number and your name and address which you will need to verify by uploading documentation. 
  • You can reach out to customer service via live chat or filing a ticket and the team is pretty responsive. 
  • The easiest way to sign up and use Bitbuy is to download the app. 
  • Bitbuy offers two modes: express trade and pro trade. Express trade has a simpler and more user-friendly interface whereas Pro Trade targets seasoned traders. 

Cryptocurrencies

  • More than 50 digital assets
  • Trade different cryptocurrencies including Bitcoin, Ethereum, XRP, Solana, Dogecoin, Polkadot, Uniswap, Litecoin, Chainlink and more. 

Restrictions for Canadian users

The following restrictions apply to Canadian citizens regardless of which exchange they use

  1. You will be asked to provide your source of funds and unless you are very wealthy you will only be allowed to trade a net amount of up to 30,000 Canadian dollars per every rolling 12 months. Exceptions to this rule are Bitcoin, Bitcoin Cash, Litecoin, Ethereum, and other mainstream coins. Also exempted from this rule are Canadians who live in Manitoba, Alberta, Quebec, and British Columbia.
  2. You can find stablecoins such as USDT and DAI. The only stablecoin you can use in Canada is USDC. 
  3. Canadian investors can’t trade crypto futures
  4. Margin trading is not available.
  5. The exchange needs to alert you if the value of your portfolio drops below a certain level and is also required to send you a monthly statement. 
  6. It is likely that Bitbuy needs to report your trade to the Canada Revenue Agency. Keep in mind that you are required to pay capital gains tax on any profit you make from cryptocurrency trading.

Bitbuy Pro features for advanced traders

  • Charts and graphs allow you to do technical analysis
  • Lower fees for amounts larger than $250,000 in trading volume
  • You can set limit orders and stop loss orders
  • Live order book

Alternatives to Bitbuy

Most new traders start with one exchange but eventually end up using more than one. The main reason for this is that your exchange does not offer the coin you want to invest in. Popular alternatives to Bitbuy in the canadian market are 

  • Coinbase
  • Kraken
  • NDAX
  • Newton
  • Coinsqaure

For a comprehensive list check out Which Crypto Platform Is Legal in Canada

If you are looking to trade riskier coins with a smaller market cap then consider using a decentralized crypto exchange such as Uniswap. Decentralized crypto trading platforms do not require that you register or share your personal information. 

To use them you are going to need to use a crypto wallet. 

There are two main categories of wallets

  1. Hardware wallets are considered safer as they are not connected to the internet
  2. Software wallets that are free to use and easy to manage on the go. 

Best crypto wallets

  • Exodus: good app for managing multiple currencies
  • Cake Wallet: popular with Monero users
  • Guarda: includes a prepaid card
  • Trezor: a popular hardware wallet
  • Ledger: the most popular hardware wallet

FAQs

Is it safe to keep crypto on Bitbuy?

Bitbuy stores the majority of the assets on its platform in cold storage which means they are impossible to access online. However, when you store your assets on Bitbuy you give custody of your private keys to the exchange. If the exchange were to become insolvent you would not be able to retrieve your crypto. For this reason, many crypto experts recommend using a crypto wallet. 

Is Canada friendly to crypto?

Canada was one of the first countries to regulate crypto. Crypto exchanges consider some of the rules too conservative and harmful to innovation: futures trading, the amount of crypto you can trade, and margin trading are all restricted in Canada. However, Canada is one of the most crypto-aware countries which is why so many exchanges are striving to register with regulatory authorities there.

How much does Bitbuy charge for withdrawal?

To withdraw fiat money to your bank account you will need to pay 1.5%. However, you can also withdraw your digital assets to a crypto address. The fee depends on the assets. Check out the fee schedule here

Does Bitbuy have a Wallet?

Bitbuy does not operate a separate decentralized wallet like Coinbase and Kraken do. However, when you store your crypto on Bitbuy it is stored in a wallet that is owned and operated by Bitbuy. This means you can transfer cryptocurrencies to and from Bitbuy. 

Has Bitbuy been hacked?

To date, Bitbuy has not been hacked though there are users who are reporting that their accounts were breached and whose funds were stolen

What is the limit on Bitbuy?

You can only withdraw up to 5000 per day using Interac e-transfer. Wire transfers cost the same (1.5%) but you can withdraw any amount. The only difference is that it takes 1-2 business days

Why is Binance shutting down in Canada?

Binance withdrew from the Canadian market in 2021 after  stricted regulations with respect to stablecoins and net trading amounts came into place. This according to Binance made Canada a non profitable market for them. The main benefit of using Binance is that it offers a wider range of coins

What is the minimum deposit for Bitbuy?

The minimum deposit for direct deposits is $50. This includes Interac e-transfers, debit and credit card transfers and Apple Pay transfers. If you want to make a wire transfer the minimum amount is $10,000.

How do I add money to Bitbuy?

The easiest way to add money to Bitbuy is to use Interac e-Transfer

  1. Sign In or Create an Account
  2. Navigate to Deposit Page which is located in your account dashboard or under a “Deposit” or “Funding” tab.
  3. Select Deposit Method: Bitbuy typically supports various deposit methods such as bank transfers, Interac e-Transfer, wire transfers, and sometimes even credit/debit card payments. Interac e-Transfer is free and deposit are funded within 30 minutes. 
  4. Set up e-Transfer by confirming via email. 
  5. Wait 30 minutes and check Account Balance
  6. Start Trading: once the bank transfer is complete, you can buy the cryptocurrency of your choice.

Do you need ID for Bitbuy?

Yes you need to be over 18 and to verify your ID in order to sign up with Bitbuy

Is Bitbuy fake?

No Bitbuy is a legit canadian cryptocurrency exchange that is regulated by the Canadian securities administrators. 

Who owns Bitbuy?

Bitbuy is owned by WonderFi. This is a publicly traded company that owns Bitbuy, Coinsmart, SmartPay, and Tetra which is a crypto custodian.

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Markos Koemtzopoulos is the founder and main writer of ElementalCrypto. He has been a lecturer at the University of Nicosia on cryptocurrencies and DeFi and has taught two courses on crypto and blockchain technology.

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