Wealthsimple, a Canadian investing app courting the country’s day-trading millennials, is checking off regulatory boxes ahead of its cryptocurrency trading debut.
- The Toronto-based firm’s “Wealthsimple Crypto” bitcoin and ether service is the newest member of the CSA Regulatory Sandbox. It secured approval and two years of filing exemptions from provincial regulator the Ontario Securities Commission (OSC) on Aug. 7.
- “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.
The leader in news and information on cryptocurrency, digital assets and the future of money, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups.