Wealthsimple, a Canadian investing app courting the country’s day-trading millennials, is checking off regulatory boxes ahead of its cryptocurrency trading debut.
- “For the first time, Canadians will be able to use a crypto platform that’s carefully overseen by regulators,” Wealthsimple General Counsel Blair Wiley told CoinDesk, saying this oversight and transparency will provide investor protections.
- Those protections are only made possible by certain caveats, pledges and partnerships - all illustrated in the OSC’s Aug. 7 decision.
- For example, Wealthsimple, a Canadian peer of U.S.-based Robinhood, will restrict crypto deposits (no outside crypto comes in) and withdrawals (no inside crypto flows out) much like its southern counterpart.
- Keeping clients' crypto in a “‘closed loop’ system” will tamp down on fraud, money laundering and faulty wallet transfers, even if it does introduce credit risk, Wealthsimple told OSC.
- Wealthsimple is farming out custodial duties to U.S.-based Gemini Trust, whose $200 million crypto asset insurance policy and U.S. licensures “benefit” the firm more than Canadian custodians could, Wealthsimple said.
- Wealthsimple Crypto is still in the pre-beta phase.