Why Can’t I Buy Crypto in Canada: Common Blockers

Published: 18th May, 2024 | Last Updated: 30th May, 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.

There are 7 reasons why you might not be able to buy crypto in Canada. This guide demystifies the common stumbling blocks, such as regulatory restrictions and exchange discrepancies, and steers you toward successfully purchasing your desired cryptocurrency in Canada.

Crypto is allowed in Canada though some restrictions may be preventing you from making your purchase.

7 Reasons you can’t buy crypto in Canada

  1. You are using an unregulated exchange via a VPN. See Which Crypto Platform Is Legal in Canada.
  2. You have exceeded the amount of digital assets that the Canadian government allows you to trade
  3. You have not met minimum or maximum deposit limits
  4. You have set a limit order
  5. It’s a technical glitch
  6. The crypto platform you are using considers your transactions suspicious.
  7. You don’t have enough to cover the transaction fees.

See How to Buy Bitcoins in Canada on how to go about it properly.

Person frustrated while trying to buy cryptocurrency in Canada

Reason 1: You used a VPN to sign up for a non-Canadian exchange

The most common reason that prevents Canadians from buying crypto is using an exchange not regulated or allowed to accept Canadian customers. This is often the case when users access exchanges via VPNs with non-Canadian IPs.

vpn, address, anonymous

For example, Binance, one of the world’s largest cryptocurrency exchanges, is one such platform that does not accept Canadian customers.

Here’s how it works.

You spoof your IP using a VPN to sign up to an exchange. You deposit funds. Then you try to buy crypto but the exchange asks you to verify your personal information. You do this and then the exchange does not allow you to buy crypto because it does not serve Canadian users.

Hence, verifying that your chosen exchange is regulated and permitted to operate in Canada is of utmost importance. This will not only allow you to deposit Canadian dollars to buy crypto but also ensure that your transactions are secure and legal, especially when dealing with the Canadian dollar.

You can find a list with which crypto platforms are legal in Canada here and which ones are banned here: Canada Crypto Ban.

Reason 2: Annual Net Buy Limits for Canadian Crypto Investors

ai generated, bitcoin, cryptocurrency

In Canada, the purchase of digital currencies is subject to certain limitations as per the regulations established by the Canadian Securities Administrators (CSA).

Specifically, for residents in some provinces, there is an annual net buy limit when trading on cryptocurrency platforms. This limit is set at CA$30,000 for the purchase of designated cryptocurrencies. However, there is an exception for individuals classified as “Eligible Crypto Investors,” who have a higher annual net buy limit of CA$100,000.

These regulations are part of the CSA’s efforts to provide a secure and regulated environment for Canadians who participate in the cryptocurrency market.

The restrictions do not apply to large crypto assets such as Bitcoin, Bitcoin Cash, Ethereum, and Litecoin.

Reason 3: Deposit Limitations for Canadian Dollar Transactions

When it comes to funding your cryptocurrency exchange account with Canadian dollars, it’s important to be aware that there are both upper and lower deposit limits, and these can vary depending on the deposit method you choose.

money, coin, cash

For instance, bank wire transfers typically allow for larger deposit amounts compared to credit card transactions, which may have lower limits due to the risk management policies of banks and credit companies. Similarly, e-transfers and debit card transactions might have their own set of limitations.

It’s crucial to check the specific limits associated with each payment method on your chosen exchange to ensure that your deposit falls within the acceptable range.

Understanding these limits will help you plan your investments and avoid any inconvenience during the deposit process.

Reason 4: You’ve set a Limit Order

blur, chart, computer

Another common roadblock when attempting to buy crypto in Canada is the placement of limit orders that remain unexecuted.

A limit order is an instruction to the exchange to buy or sell an asset at a specific price or better. While this can be a strategic move to control the price at which you buy or sell, it comes with the risk of the order not being executed if the market price does not reach your set limit.

For instance, if you’ve placed a limit order to buy Bitcoin at $40,000 CAD, but the market price hovers above this level, your order will stay pending until the price drops to meet your limit. This means you could miss out on potential market opportunities while waiting for your order to execute.

If you don’t know how to use limit orders consider using a market order. This executes your order at the going market rate.

Reason 5: It’s a technical glitch

problem, technical, issues

Occasionally, the reason you’re unable to buy crypto in Canada could be as simple yet frustrating as a technical glitch. These glitches can range from temporary server outages to persistent software bugs within the exchange’s trading platform. It could be something as minor as a momentary disconnection, or as major as a systemic error that affects multiple accounts or transactions.

Technical issues can often be resolved by refreshing the page, clearing your browser’s cache, or even waiting a few minutes before trying again. However, if the problem persists, it’s advisable to reach out to the exchange’s customer support for a resolution. Keeping an eye on the exchange’s social media channels and status pages can also provide timely updates on any ongoing technical difficulties.

Make sure you check the exchange’s website for any notices about outages or maintenance. You can also reach out to customer support.

Reason 6: You’re on a disallow list.

The exchange considers your transactions suspicious or has been ordered to freeze your transactions.

mafia money

This can happen if the exchange’s automated systems flag your account for unusual activity, which can include a high frequency of transactions, large volumes of trades, or patterns that deviate from your normal trading behavior. This usually happens when it suspects money laundering.

It’s also possible that your account could be frozen as a result of compliance with regulatory orders or law enforcement requests.

When you find yourself unable to execute trades, it can be quite perplexing, especially if you’re not aware of any wrongdoing on your part.

Being on a disallow list doesn’t necessarily mean you’ve done something illegal; sometimes, it’s simply a matter of the exchange being overly cautious in its efforts to prevent fraudulent activities.

If you believe you’ve been wrongly placed on a disallow list, it’s important to contact the exchange’s customer support immediately to clarify the situation.

Be prepared to provide additional verification documents or information to prove the legitimacy of your transactions. Transparency and prompt communication with the exchange can help resolve the issue and restore your ability to trade.

Reason 7: Insufficient Funds for Transaction Fees

insufficient funds

It might seem like a no-brainer, but a surprisingly common issue is simply not having enough funds to cover the transaction fees associated with buying cryptocurrency. These fees can vary widely depending on the exchange, the type of transaction, and even the current demand on the network.

For example, if you’re trying to buy $100 worth of Bitcoin, but the transaction fee is $10, you need to have at least $110 in your account.

What to do if you can’t buy crypto in Canada

There are several steps you can take.

  1. First off, if transactions through your preferred crypto exchange account are unsuccessful, you might want to consider withdrawing your money to your bank account and turning to a regulated exchange.
  2. Alternatively, you can buy crypto via Bitcoin ATMs or P2P trading platforms and then send it to a decentralized exchange.
  3. If these options don’t resolve the issue, reaching out to the customer support of the respective exchange can provide tailored assistance. The key is to remain patient and explore different avenues, including options to sell cryptocurrency.
  4. A final option is to send any digital assets you may have to a crypto wallet. From there you can connect to a decentralized exchange and trade crypto with less hassle.

Why use crypto wallets?

Using a crypto wallet is essential for anyone looking to have full control over their digital assets. Unlike keeping your cryptocurrency on an exchange, a wallet gives you personal custody of your coins, meaning you’re not dependent on the security or stability of the exchange platform.

This added layer of security ensures that even if an exchange is compromised, your cryptocurrency remains safe.

Furthermore, wallets can offer additional features such as signing smart contracts, interacting with decentralized applications (dApps), and providing backup options to recover your assets in case of device failure. They are the digital equivalent of a personal safe, where your digital currencies are guarded by keys that only you possess.

There are two types of wallets

  • Hardware wallets aka cold wallets allow you to store your crypto in cold storage i.e. offline
  • Hot wallets aka online wallets allow you to manage your crypto assets on the go.

See Which Is the Best Crypto Wallet in Canada for more. 

Regulatory Hurdles in Canada

While the allure and potential returns of cryptocurrency are enticing, comprehending Canada’s regulatory landscape governing this field is vital. These rules are not meant to inhibit your crypto journey but rather to ensure safety and fairness in the market.

Let’s examine some of these regulatory challenges in greater detail, beginning with securities regulation.

Securities Regulation

Securities regulation plays a significant role in shaping the crypto market in Canada. The Canadian Securities Administrators (CSA) apply provincial securities laws to cryptocurrency, leading to complex and evolving regulatory structures.

Under Canadian law, crypto trading platforms may be subject to securities legislation if they involve contractual rights to crypto assets that constitute a derivative or security. However, established crypto assets like Bitcoin and Ethereum are not typically regarded as securities.

In fact, about ten crypto trading platforms in Canada are registered as securities dealers, and two have registered with the Investment Industry Regulatory Organization of Canada (IIROC). These regulations ensure the security of your investments and the integrity of the crypto trading platform market.

Financial Institutions’ Stance

In addition to securities regulation, the stance of financial institutions plays a critical role in the crypto landscape in Canada. Canadian banks not only recognize and support cryptocurrency trading but also comply with federal and provincial regulations.

The payment methods permitted by Canadian banks for crypto trade include:

  • Debit card transactions
  • Interac e-transfer
  • Bank wire transfer
  • Credit cards (under certain conditions)

These options provide flexibility for investors to fund their crypto purchases, including digital currency, thereby facilitating the buying process.

Choosing the Right Crypto Exchange

Comparison of different crypto exchanges in Canada

Now that we’ve navigated through the regulatory landscape, let’s shift focus to another significant aspect—choosing the right online exchange.

In Canada, several crypto exchanges operate, including

Each has its unique features, trading fees, and available coins. I prefer the international exchanges as they have more liquidity which reduces the chances of glitches occuring.

Check out my review on the best Canadian crypto exchanges for more.

How to Buy Cryptocurrency in Canada: A Step-by-Step Guide

If you’re interested in joining the exciting world of cryptocurrency in Canada, this guide will walk you through the process step by step. Buying cryptocurrency in Canada is legal and relatively straightforward, but there are some important considerations to keep in mind.

Step 1: Choose a Regulated Canadian Exchange

Start by selecting a cryptocurrency exchange that is regulated and permitted to operate in Canada. This ensures that your transactions are secure and that the exchange complies with Canadian financial regulations.

If you only care about bitcoin then see my review of the 10 Best Platforms to Buy Bitcoin in Canada.

Step 2: Create and Verify Your Account

Once you’ve chosen an exchange, you’ll need to create an account. This will involve providing some personal information and possibly uploading identification documents for verification purposes.

Step 3: Deposit Canadian Dollars

Fund your account with Canadian dollars using one of the approved methods, such as bank transfer, e-transfer, or debit card. Remember to check for any deposit limits that may apply.

Step 4: Place Your Order

With funds in your account, you can place an order to buy the cryptocurrency of your choice. You can opt for a market order for immediate execution or a limit order to specify the price you’re willing to pay.

Step 5: Secure Your Cryptocurrency

After purchasing, it’s crucial to store your cryptocurrency securely. Consider transferring your assets to a private wallet for added security.

By following these steps and staying informed about the regulatory environment, you can confidently navigate the process of buying cryptocurrency in Canada.

FAQs

Why can’t I buy crypto on Binance Canada?

Binance exited the Canadian market after regulation became stricter as a result of FTX’s collapse. Key restrictions that make Canada unattractive are that there is a cap on the net trading amount for most altcoins, margin trading is not allowed and most stablecoins aren’t allowed. See Is Binance Legal in Canada.

Why is crypto banned in Canada?

Crypto is not banned in Canada; it’s simply not recognized as legal tender by the government. This distinction means that while cryptocurrencies can be bought, sold, and traded, they cannot be used as official currency for debt repayment and other financial obligations where Canadian dollars are required. However, the Canadian financial ecosystem has been increasingly accommodating towards the use of crypto as an investment asset, subject to the country’s regulatory frameworks designed to protect consumers and ensure the stability of the financial system. For example, Canada issued crypto Exchange-Traded Funds (ETFs) before the United States did.

Did Canada freeze cryptocurrency?

Yes, during the trucker riots, some crypto assets were frozen.

Do you pay tax on crypto in Canada?

The short answer is yes. In Canada, cryptocurrencies are not considered legal tender, but this doesn’t exempt them from tax obligations. The Canadian Revenue Agency (CRA) treats cryptocurrency like any other investment for tax purposes. In Canada, 50% of gains made from the sale or exchange of cryptocurrency are subject to capital gains tax. It’s important to keep detailed records of your cryptocurrency transactions, as the CRA requires individuals to report any capital gains or losses as part of their income tax return.

If you’re using cryptocurrency for purchases, it’s considered a barter transaction. The value of the goods or services purchased with cryptocurrency must be included in the seller’s income for tax purposes. Additionally, if you mine cryptocurrency, any income from mining is also taxable. The same goes for staking crypto.

Can you buy crypto in Canada?

Yes, you can buy crypto in Canada, provided you use a regulated exchange and follow the country’s laws and regulations. If you are looking to buy altcoins in Canada you might want to use a decentralized exchange.

What should I do if I can’t buy crypto in Canada?

Consider withdrawing your cash and using a regulated exchange, buying crypto via an ATM or P2P platform, or reaching out to customer support.

What are the common reasons for not being able to buy crypto in Canada?

The common reasons for not being able to buy crypto in Canada include using an unregulated exchange, not meeting minimum deposit requirements, exceeding maximum deposit limits, and facing issues with limit orders. Be sure to choose a regulated exchange and comply with deposit requirements for a smooth purchase experience.

What are some suggestions if I can’t buy crypto in Canada?

If you’re unable to buy crypto in Canada, consider using a regulated exchange, purchasing crypto via an ATM or P2P platform, or reaching out to customer support for assistance. These options may help you access cryptocurrency in Canada.

Are there any regulatory hurdles for buying crypto in Canada?

Yes, you cannot trade more than $30,000 in the net trading amount over a rolling 12-month period for certain coins in certain provinces. See Canada’s cryptocurrency regulation for more.

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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