FIRST: A MESSAGE FROM OUR CO-FOUNDER AND CBO, MICHAEL KORAL:
Transcript:
Hi, my name is Michael Koral and I’m one of the Co-Founders of CoinSmart, your trusted partner in crypto. We appreciate your loyalty and want to share some of the changes that you may have seen over the last little while.
You signed up for our platform because you believe in the cryptocurrency revolution. Bitcoin changed the game and many other crypto assets have followed in its footsteps. You were ahead of the game, but as we’ve said before, this is only the first inning of crypto.
The ethos of cryptocurrency has always been its decentralized nature, however, as a crypto trading platform we see a huge opportunity in cooperating with regulators to ensure Canadians have a safe and trustworthy platform to trade crypto assets.
On October 22nd we were granted restricted dealer registration with the Ontario Securities Commission and all other Canadian Securities Administrators members.
With a regulatory first approach, we have collaborated to come up with a framework that we believe to be fair, balanced, and transparent for YOU our clients. With this comes some changes and security upgrades to our platform. I will take only a few more seconds of your time today to introduce these changes at a high level, and then we have a series of resources you can find below to take a deeper dive and learn more.
- Mandatory 2-Factor Authentication
- Withdrawal Process Update – Email confirmations replacing PIN
- No longer offering XRP
- Updates to order matching
- An account appropriateness questionnaire
- Annual trading limits on coins other than BTC / ETH / BCH / LTC.
We’ve said it before and we’ll say it again! This is only the beginning of crypto, we thank you for your trust and we look forward to continuing to be your preferred crypto trading platform.
Let the trend be your friend! Thank you!
Best Regards,
Michael Koral
Co-Founder and CBO
CoinSmart
The changes that we will be bringing into our platform fall broadly under the following buckets:
- Security, Platform, and Product.
- Ontario Securities Commission (OSC) Requirements.
#1 Security, Platform, and Product
Overview of the changes:
- Mandatory 2-factor authentication
- Withdrawal process update
- Delisting XRP
Mandatory 2-Factor Authentication
Security has always been a priority for CoinSmart. In fact, it is one of the main traits that make our trading platform so user-friendly. To further bolster account security, CoinSmart has already implemented mandatory 2-factor authentication.
Transcript:
Hey there.
You may have noticed that when you log into CoinSmart, you are now required to set up two-factor authentication (2FA) code. In order to secure your account, we’ve made some changes to the login process. Two-factor authentication is now necessary for all accounts.
Let’s take a look at how to set it up.
Google Authenticator is an app that works with two-step verification for your CoinSmart account to provide an extra layer of security when signing in. Please make sure that you have the Google Authenticator app downloaded on your smartphone.
- When you log into CoinSmart on your computer, you will see a screen that asks you to set up two-factor authentication.
- Open Google Authenticator on your smartphone and click the plus (+) sign in the bottom-right to scan a new QR code.
- CoinSmart will show you a QR code that will link Google Authenticator to your CoinSmart account.
- Please scan this QR code with your smartphone.
- Once scanned you will be prompted to enter the code shown on your Google Authenticator app.
- After you’ve entered this code correctly, you will then be set up to use your account.
Remember that from now on, you’ll always need to enter your two-factor authentication code when logging in to your account or making withdrawals.
Withdrawal Process Update
From now on, every single time you withdraw from your CoinSmart account, you will be sent a confirmation email to your inbox. Your withdrawal will only go through after you click on the link in your withdrawal confirmation email. We have taken these measures to add an extra layer of security to your accounts. Your security is our top priority, and adding these checkpoints go a long way in fraud prevention.
Transcript:
Hey there.
This video will talk about changes to our withdrawal process—adding in a confirmation email to make sure that your crypto is being safely transferred to one of your own wallets.
Let’s get straight into an example of it.
When you go to your wallet and select the crypto asset that you’d like to withdraw, you’ll be taken to our normal withdrawal page. As always, please remember to be careful of bad actors and make sure that you are withdrawing only to your own crypto wallets.
On this screen, you enter the wallet address that you would like to receive to, as well as the amount you’d like to withdraw. Here you’ll receive our first confirmation screen and you can click [Accept] to move forward to the next one. Next, you’ll have to enter your two-factor authentication (2FA) info to confirm that it is in fact you making this request.
Finally, you’ll see a new screen that will let you know the final step in the withdrawal process, to check your email and confirm the withdrawal request.
- Go to your email inbox and look for a new email from CoinSmart. In this email, you’ll have a link to click that will take you to the confirmation page.
- On this page, you have options to [Reject] or [Accept] this withdrawal request.
- If you didn’t make the withdrawal yourself, please make sure to reject the request. If it was you, you can click accept and this will complete the withdrawal.
XRP Delisting
Ripple Labs Inc. is currently in the middle of a lawsuit with the U.S. Securities and Exchange Commission. The SEC deems Ripple’s XRP token as an unregistered security.
Because of this reason, XRP no longer fits in with our internal KYP policy. As a result, we will be delisting and suspending all trading of XRP as of Nov 22, 2021. This decision follows a growing number of existing CTP’s in Canada and the United States that have also delisted XRP.
Please make sure that you sell, trade, or transfer XRP off the CoinSmart platform by Nov 22, 2021.
#2 OSC Requirements
The Ontario Securities Commission (OSC) is an independent Crown corporation that regulates Ontario’s capital markets by making rules that have the force of law and adopting policies that influence the behaviour of capital markets participants.
The OSC and the securities regulators from each province and territory have teamed up to form the Canadian Securities Administrators (CSA). The CSA is primarily responsible for developing a harmonized approach to securities regulation across the country.
The CSA, jointly with the Investment Industry Regulatory Organization of Canada (a Self Regulatory Body), published a Notice to provide guidance on how applicable securities legislation applies to CTP’s that facilitate or propose to facilitate the trading of crypto assets within Canada.
In light of CoinSmart officially becoming an OSC-approved restricted dealer, we will bring in the following three changes:
CoinSmart has made the following three changes:
- Updates to order matching
- An account appropriateness questionnaire
- Annual trading limits on coins other than BTC / ETH / BCH / LTC.
Updates To Order Matching
On Monday, Oct 25, 2021, CoinSmart removed the ability for clients to trade with one another and fill each other’s orders. This is why our orderbook no longer displays your limit orders. Your limit orders will still exist and will work as intended, however, they will only be filled by CoinSmart’s own liquidity.
You can always view your limit orders in your open orders. We are actively working on bringing this functionality back to you, our advanced traders.
Account Appropriateness Questionnaire
Crypto assets aren’t for everyone, and we have designed these questions to determine if a Crypto asset account is appropriate for you.
Transcript:
Hey there, in this video we’d like to take you through our new account appropriateness assessment. You will need to complete this assessment the next time you login to your CoinSmart account.
The goal of this questionnaire is to ensure you are aware of the risks you are taking trading crypto assets as a Canadian resident.
After logging in, you’ll find our risk acknowledgment documents. We encourage you to read through each of them. and you must click [I agree] for each one.
At the end, you will be required to provide a signature that matches your legal name. This can be found at the top of your screen to the right of the CoinSmart logo.
After you’ve completed this, you will be moved on to our account appropriateness assessment. These questions help us determine if crypto assets are right for you. Based on your responses, we will provide you with a loss-limit recommendation and we will alert you if your account value drops below your defined loss-limit threshold.
You can find your answers and recommended loss limits on your profile, under [Account Settings], in the [Verification] section. If you have any trouble with account appropriateness, please contact our customer experience team by clicking the green [Support] button in the bottom-right corner of your screen
What questions will you be asked?
- What is your yearly income?
- What is your net worth (all assets minus debts)?
- How many years of investing do you have investing in crypto assets?
- How much of your crypto asset investment are you prepared to lose due to market volatility?
- Will you be using any borrowed funds (including credit cards) for your crypto investments?
Why am I being asked these questions?
Depending on your answers, you will be given recommended loss limits to help mitigate any potential losses. The loss limit acts as a safety valve that may assist in protecting your Crypto Assets from market volatility.
How does it work?
Let’s say that based on your answers, our system determines that you should have a loss limit of 10%. Now, let’s say that your portfolio is worth $10,000. However, the market suddenly tanks, and now your portfolio is worth $8,900, crossing the 10% loss limit.
You will be notified, via email, that your portfolio has crossed the 10% loss limit. Following that, you are free to take whatever action you deem necessary.
If you have any questions about this decision, please get in touch with our Client Experience (CX) team.
Annual Trading Limit
As a CoinSmart customer, the maximum amount of total Crypto Assets combined (excluding BTC, ETH, BCH, and LTC) you may purchase and sell (net acquisition cost) in a rolling 12 month period cannot exceed $30,000 CAD.
Let’s take a look at some hypothetical examples to understand how these limits work:
Example 1
- You buy $30,000 worth of ADA, XLM, and DOGE putting your buy limit to $0.
- The market triples and now your portfolio is worth $90,000.
- Now, if you decide to sell $30,000 worth of crypto, it will reset your buy limit back to $30,000.
Why? Because at the point of buying, you purchased $30,000 crypto and at the point of sale, you sold $30,000 crypto. Both managed to cancel each other out.
Example 2
- You buy ADA worth $30,000
- Market drops and now your ADA is worth $15,000
- You sell off all your ADA and your buying limit only goes up to $15,000.
Why? At the point of buying, you purchased $30,000 of ADA. At the point of selling, you sold the same amount of ADA tokens. However, because of devaluation, they are now worth $15,000. 30,000-15,000 = $15,000 -> your new buying limit.
Example 3
- You buy XLM worth $30,000.
- Market skyrockets, and let’s say your XLM is now worth $60,000.
- You decide to sell all of your XLM. Even then, your buy limit will still reset to $30,000.
Why? The buy limit has a hard upper limit of $30,000
Example 4
- You buy DOGE worth $30,000.
- Let’s say Dogecoin crashes horribly, and the market goes to $0.
- However, you will still not be able to buy any crypto (except BTC, ETH, BCH, and LTC)
Why? Since you have already touched your buy limit of $30,000.
Example 5
- You buy $15,000 of ADA (Meaning you still have a $15,000 buying limit left)
- ADA drops to $10,000 and you decide to sell them off.
- Your new buying limit is $25,000.
Why? You sold off your portfolio for $10,000 and added it to the $15,000 leftover, giving you a $25,000 buy limit.
What is the significance of this step?
Crypto assets are known to be volatile. The buying limit manages our client’s risk exposure.
Conclusion
We realize that a lot of changes are happening at the same time, and it could get overwhelming. However, we are only making these changes to provide you with the most innovative, compliant, user-friendly crypto trading platform out there. Our team is working around the clock to ensure that this transition happens as smoothly as possible.
As always, please reach out to our Client Experience (CX) team in case you have any questions.
