I just released a full video breakdown comparing the ultimate crypto dilemma for Canadians: Regulated vs. Unregulated Exchanges.
The common advice I see is to stick to regulated platforms (like Shakepay or Bitbuy), simply because such platforms are regulated in Canada and considered to be safer. So I compared 8 key factors if I were selecting which crypto exchange to use now:
Fees & Costs (Unregulated WINS)
- Regulated: High spreads and trading fees often lead to 0.5% to 2% in total costs on simple buys. You lose hundreds per year if you trade often.
- Unregulated: Fees are typically 0.1% or less. A massive saving for any active trader.
Safety & Protection (TIE)
- Regulated: You get official oversight and client fund segregation. BUT, the CIPF does NOT cover your crypto, only cash. The Catalyx example shows regulated firms can still fail with user funds lost.
- Unregulated: No Canadian regulatory protection. BUT, global giants have internal reserves. FTX is paying back 100%+ of the 2022 dollar value, and Bybit covered a recent $1.5 billion hack from their own funds.
Getting Money In/Out (Regulated WINS)
- Regulated: Big win. Instant Interac e-Transfer and direct bank withdrawals, typically in minutes.
- Unregulated: Deposits often blocked by Canadian banks. You must use extra steps (send crypto from a regulated source first), which adds fees and a taxable event. or uses P2P.
Coins Available (Unregulated WINS)
- Regulated: Only the big, approved coins. You often wait days or weeks for new, trendy coins to be listed.
- Unregulated: New meme coins (like TRUMP or PEPE) show up the same day. Waaay more coins available in general. Crucial for jumping on early hype.
Interface & Ease of Use (Regulated WINS for beginners)
- Regulated: Designed for beginners, looks like your banking app, buy crypto in two taps.
- Unregulated: More charts and options—looks scary at first but easy to master with a quick tutorial.
Privacy & KYC (Unregulated WINS)
- Regulated: Full, extensive KYC: ID, address, job, income, and sometimes net worth disclosure.
- Unregulated: Many platforms let you trade up to $20,000 per day with minimal or no KYC.
Advanced Trading (Unregulated WINS)
- Regulated: Spot trading only. A hard CSA rule bans all leverage, futures, and derivatives for retail investors to 'protect' you from big losses.
- Unregulated: Full access to the global toolbox: 125x leverage, futures, options, and staking.
Taxes & Reporting (TIE)
- Regulated: Provides clean transaction history ready for the CRA.
- Unregulated: Uses tools like Koinly or CoinLedger which connect globally and produce the exact same CRA-ready reports in minutes.
Final Scorecard: 4-2 (Unregulated wins on Features & Cost)
The Verdict:
- Use Regulated if: You are a beginner, you want simple CAD in/out, or you only buy and hold Bitcoin/Ethereum.
- Use Unregulated if: You are an experienced trader, need to save on fees, or require access to new coins fast and advanced trading tools.
Let me know if you have anything to add in the comments.
