Exchanges play a pivotal role in the crypto ecosystem of a country, facilitating the trading of cryptocurrencies. Canada has allowed registered crypto asset trading platforms to offer crypto products and services to investors. Moreover, the landscape is particularly vibrant, with a range of both international and domestic platforms catering to the growing enthusiasm for crypto.
When choosing a crypto exchange in Canada or any other country, some primary factors need to be considered, including platform security, coin diversity, liquidity, fee structure, educational resources available and more. Each crypto exchange comes with its own set of unique features and fee structures.
This article gives an overview of the crypto exchanges in Canada, discussing what they bring to the table. It gives an insight into what products and services they offer, security, fee structure and possible cons.
Bitbuy
Bitbuy, established in 2016 by Adam Goldman, is a frontline intra-Canada exchange serving only Canadian investors. It supports transactions only in Canadian dollars (CAD) to allow for the funding of accounts and trading pairs.
The platform is recognized for its user-friendly interface, making it accessible for beginners, while also offering advanced tools for more experienced traders, such as a live order book for real-time trading.
For business enterprises that want to add crypto to their balance sheet, the platform has especially designed corporate solutions. These include access to over-the-counter trading desk liquidity, a dedicated account manager, personalized reporting and connections with qualified account professionals.
The platform also stands out for its safety features. The platform has secured the approval of the Canadian Securities Administrators (CSA) and Ontario Securities Commission (OSC) as a registered marketplace for crypto assets and also got registered with the Financial Transactions and Reports Analysis Centre of Canada (FINTRAC) as a money services business.
Bitbuy has a 95% cold storage policy, which shields digital assets from potential hacks. Digital assets held by the exchange also have insurance coverage. Regarding support, corporate customers can call the Bitbuy team Monday through Friday, 9 am to 6 pm EST. Other customers can contact the exchange via a web form, and the team will call back. The exchange has provided extensive documentation for its support.
Compared to some global exchanges, Bitbuy offers a limited number of cryptocurrencies. Regarding the fee, users need to pay between 0% and 2% for selling crypto, depending on trading volume. Withdrawals cost 1.5% via wire transfer.
VirgoCX
A Toronto-based crypto exchange launched in 2018, VirgoCX is a commission-free cryptocurrency exchange that levies a variable spread fee on every transaction, impacting the overall cost of trades. The spread refers to the difference between the midpoint and the bid/ask price.
It is registered with FINTRAC as a money services business and a Restricted Dealer by the Canadian Securities Administrators (CSA). A unique feature of VirgoCX is a virtual gift card that users can use to give crypto to anyone they want. Recipients need to verify themselves to get access to the gift. The exchange allows users to buy a gift card using fiat currency or a crypto balance and send it via email. The recipient gets an email with the gift card code along with instructions for redeeming it.
To ensure security, VirgoCX retains a part of deposited crypto in hot wallets for regular business trading and withdrawals, while transferring the majority of crypto to a cold wallet. Two-factor authentication (2FA) is mandatory for anyone transacting on the exchange. All sensitive information is encrypted. For the safety of the users’ funds, the exchange uses a qualified custodian called Coinbase Study. There is 1 million CAD in crime insurance coverage for cryptocurrencies held with Coinbase Custody, providing protection against theft.
The exchange has two distinct trading interfaces: Quick Trade and Advanced Trade, for beginners and advanced traders, respectively. Quick Trade is suitable for small and medium size orders. Advanced Trade, however, provides traders access to sophisticated tools such as technical analysis, recent transaction history, charting tools, order book depth and more. The exchange also supports over-the-counter (OTC) trades for high net-worth investors.
Coinsquare
Founded in Toronto in 2014 by Jonathan Goldman, Coinsquare is among the largest exchanges in Canada. It started off as a retail crypto exchange and later opened up a mining venture and a capital markets division that focuses on high-value individual investors and institutions.
Regulated by the Investment Industry Regulatory Organization of Canada (IROC), Coinsquare stores 95% of its digital assets in cold storage. The exchange has taken steps for precision tracking of ledger management and account balances, which are concerns with crypto exchanges. 2FA authentication helps users retain control even if a hacker gets hold of their password.
The exchange started off as a Bitcoin (BTC) exchange but now has expanded its portfolio of digital assets to include Ether (ETH), Bitcoin Cash (BCH), Litecoin (LTC), Dash (DASH) and more. Coinsquare offers two kinds of orders: Bit Markets and Quick Trade. Bit Markets operates a maker/taker model where users who are market-makers pay a lower fee than the users who take the market price.
A maker is the one placing an order and adding liquidity to the markets. A taker is an individual who matches immediately with an existing order and, during the process, takes the liquidity away from the exchange. In the Quick Trade process, the user doesn’t place an order on the book, and Coinsquare itself acts as a counterparty. This allows for the immediate execution of trades without the need for matching orders on the open market.
Looking at the not-so-rosy side, Coinsquare suffered a data breach in November 2022. User details such as name, address, phone number and wallet address were compromised. However, passwords and digital assets remained safe.
Coinsquare has also come into the crosshairs of the Ontario OSC after it was accused of inflating its trading volumes. The exchange later had a settlement agreement with the regulator, admitting that illicit wash trades were conducted on the platform, amounting to a total value of around 590,000 BTC at the time of the incident.
Coinbase Canada
Coinbase, one of the largest cryptocurrency exchanges in the world, operates in Canada as well. Established in 2012 in San Francisco by Brian Armstrong and Fred Ehrsam, Coinbase signed an enhanced Pre-Registration Undertaking (PRU) with the Canadian authorities in March 2023 and has been working with regulators to expand the range of its services in Canada.
A significant plus of Coinbase is the value associated with its name. For the safety of users’ funds, Coinbase stores all the app information, user data and wallet addresses in offline wallets, making it less susceptible to online threat actors. The exchange uses AES-256 encryption to secure the private keys of users.
The simple interface of Coinbase makes it easy for users to navigate. Moreover, users can also earn rewards for watching short modules about various crypto projects and concepts. Canadian users can add fiat (CAD) to their account using an Interac e-transfer after completing a full onboarding process, which includes the account appropriateness assessment.
As for the cons of using Coinbase, some users might find the long onboarding process a bit cumbersome. Trading fees are also relatively high.
Kraken Canada
Founded in 2011 in San Francisco by Jesse Powell and Thanh Luu, Kraken Canada stands out for offering three products catering to three different sets of users: Kraken’s app for beginners, Kraken Pro for advanced crypto traders and Kraken NFT for trading nonfungible tokens (NFTs). Kraken’s app facilitates the buying and selling of cryptocurrencies on the go. Kraken Pro enables access to spot and staking from a single interface. On Kraken NFT, one can collect, explore and trade NFTs with no gas fees.
The platform has implemented rigorous standards that earned it SOC 2, Type 1, which refers to a report of procedures and controls an enterprise has set up at a point in time. They have also conducted proof-of-reserve audits. Regarding payment options, one can fund an account with a credit or debit card, e-transfers, wire transfers or Canada Post.
As for cons, some advanced trading tools available elsewhere for Kraken users are restricted in Canada. For instance, margin trading is available to users who meet the permitted client status. Individual users with an aggregate realizable value exceeding 5 million CAD and corporate users with net assets of at least 25 million CAD are eligible.
NDAX
A Calgary-based exchange founded in 2018 by Bilal Hammoud, NDAX is known for its friendly user interface, security and low fees. NDAX has implemented institutional-grade crypto security and earned SOC2 Type II certification, which examines the control of the enterprise over one or more of the trust services criteria. The exchange stores most of its digital assets in cold storage, protected by multisignature technology.
The platform holds insurance coverage for incidents related to cold wallets, internal theft, hardware security module (HSM) malfunction, theft incidents related to its hot wallets and general business liability.
To safeguard users’ fiat, NDAX keeps it in a segregated bank account at a state-owned financial institution, separate from the operating capital of the exchange. NDAX is registered with FINTRAC and Revenue Québec as a Money Service Business (MSB). The platform adheres to compliance with the Proceeds of Crime (Money Laundering) and Terrorist Financing Act (PCMLTFA).
Talking about cons, the number of digital assets available on NDAX is comparatively smaller. Also, liquidity might be an issue due to lower trading volumes. This can result in higher spreads and prices for users.
Crypto.com
Founded in Hong Kong in June 2016 by Kris Marszalek, Bobby Bao, Rafael Melo and Gary Or, Crypto.com holds ISO 22301:2019, ISO/IEC 27701:2019, ISO/IEC 27001:2013, PCIDSS v3.2.1 Level 1 and Service Organization Control (SOC) compliance. It is also assessed at Tier 4, the highest level for the National Institute of Standards and Technology Cybersecurity and Privacy Frameworks.
The exchange stands out for its prepaid card, which can be topped up using a crypto wallet, fiat wallet or credit/debit card on the Crypto.com app. The card provides crypto holders with an easy way to access and spend their assets by converting their funds into a debit card.
Users can choose from a string of card tiers. These tiers are based on the amount of staked Cronos (CRO), Crypto.com’s native cryptocurrency. Rewards from card usage are given in CRO and include cashback and rebates for services like Spotify and Netflix, although these are subject to certain conditions and limits.
Another advantage of Crypto.com is that it offers a wide range of cryptocurrencies. The platform offers plenty of resources to augment one’s crypto knowledge. For business enterprises, the exchange facilitates receiving payments in crypto.
Regarding security, the exchange holds fiat currencies deposited by users in regulated custodian bank accounts. They have put in place stringent controls on access rights to digital assets in both cold and hot wallets. To establish holdings of reserves, they verify through proof-of-reserves conducted by an independent third party.
One notable disadvantage is the requirement to stake a significant amount of CRO to unlock higher-tier benefits, which might not be suitable for all users. The card comes with several other costs, such as inactivity and top-up fees, mainly when using credit or debit cards.
Newton
Named after Sir Isaac Newton and founded in Toronto in 2018 by Dustin Walper and Erynn Saunders, Newton is a beginner-friendly exchange with a simple interface. For advanced traders, Newton Pro is offered. Tailored for the Canadian market, the exchange has noteworthy features, such as no trading fees, instant verification, third-party custody of funds, competitive spreads and high liquidity. For regular automated investment, users can set up recurring buys.
Institutional-grade storage for digital assets and regular off-site backups help keep the exchange secure. It is compliant with the Personal Information Protection and Electronic Documents Act (PIPEDA) and FINTRAC.
Newton doesn’t charge a commission from its users; rather, it makes money by charging spreads on trades.
As for the cons, the number of cryptocurrencies available on Newton is limited compared to larger exchanges. Users looking for a wider range of altcoins or lesser-known cryptocurrencies might find the selection limited.
Wealthsimple
Founded in 2014 in Toronto as a robo-adviser platform by Michael Katchen and Rudy Adler, Wealthsimple started by helping investors automatically invest in stocks and later expanded into cryptocurrencies. WealthSimple users have the option to select an algorithm for automated investing or opt for personalized guidance from a human adviser.
An advantage of using Wealthsimple is that it allows access to both stocks and cryptocurrencies, unlike most cryptocurrency exchanges. However, all features available to stock traders aren’t available to crypto traders.
For instance, stocks allow fractional shares, but crypto investing doesn’t. A fractional share refers to a share of equity that is less than one full share. The availability of fractional shares in stocks makes them more affordable for retail investors.
If one looks for cons, it could be relatively high fees. For instance, users pay an operational fee between 1.5% and 2% each time they make a crypto transaction on the platform.
Choosing the right platform is the key
Broadly, Canada hosts two types of exchanges: those offering services exclusively for the country and international exchanges operating in Canada. Each exchange has its own set of features and security measures. Various platforms excel in different features such as learn and earn, advanced trading, robo-advised portfolios, gift cards, low fees, OTC trades, etc.
Registration with relevant financial authorities and security measures such as 2FA and cold storage are some basic criteria when deciding on the right crypto exchange. Once these are met, a trader needs to analyze the features in the context of their trading requirements before zeroing in on one.
Written by Dilip Kumar Patairya