• Wealthsimple, a Canadian wealth management application, is entering the cryptocurrency space with a new trading platform which is currently in beta testing
  • Customers will be able to trade Bitcoin and Ethereum, the top 2 cryptocurrencies in terms of market capitalization
  • As FinTech companies and banks enter the crypto space, Canada’s regulatory framework needs to catch up

Toronto-based Wealthsimple is launching a cryptocurrency trading platform.

People will soon be able to trade Bitcoin and Ethereum through the company’s mobile banking app. Wealthsimple Crypto is currently in private beta and will be rolled out to customers in the coming weeks.

According to its website, the new service is housed under a new subsidiary, Wealthsimple Digital Assets Inc., which is authorized by FINTRAC. It’s also working with the Ontario Securities Commission to outline a regulatory framework. Wealthsimple plans to add more cryptocurrencies to the platform once those puzzle pieces are in place.

Working With Gemini on Custody

The cryptocurrencies traded through Wealthsimple will be custodied at Gemini Trust Company, a cryptocurrency exchange founded in 2014 by Cameron and Tyler Winklevoss. GTC is regulated by the New York Department of Financial Services. Wealthsimple built the rest of the technology powering its trading platform.

When speaking to Betakit, Wealthsimple CEO Michael Katchen hinted at expanding further into the crypto space, but didn’t go into specifics. He simply said that Wealthsimple is starting to think “about the role that crypto is playing in the financial services ecosystem. Adding it as a way to buy and sell cryptocurrencies is a great place to start.”

Wealthsimple started in 2014 as an automatic investing platform. The company now has several offerings that can be divided into three pillars of saving and investing, responsible credit, and smart insurance. Katchen intends to grow the company into a full-stack financial service with the potential to push into retail banking.

Wealthsimple Crypto will offer unlimited commission-free trades with real-time quotes. Trading will be available 24/7, all year round through iOS and Android. And withdrawals and deposits will be in CAD. There will also be no minimum account size.

How WealthSimple is Building Regulations – And Trust

Canadian Government

Wealthsimple’s new service might be a sign that crypto is here to stay. But its novelty means that regulations are still hazy. Back in January, the Canadian Securities Administrators (CSA) set out guidelines meant to help determine when securities regulation applies to digital currencies.

The guidelines followed a public consultation held in March 2019. The CSA wants to have a “regulatory regime” for crypto trading platforms by 2022, according to their 2019-2022 business plan.

However, the CSA is not a federal body. It’s a coalition of existing securities regulators across Canada’s provinces and territories. Canada is the only developed federal democracy that doesn’t have a securities regulatory authority at the federal level. Currently, regulatory frameworks exist at the provincial level.

These developments were due in large part because of the Quadriga CX saga. The Vancouver-based trading platform, which lost access to $190 million CAD after their founder died, was a wake-up call to regulators and the crypto community at large. It highlighted the lack of regulatory oversight for the cryptocurrency industry in Canada. 

Since Wealthsimple is now moving into crypto, they can use their experience as a regulated entity to work with regulators to help Canadians access cryptocurrencies in a secure, easy, and affordable way.

Building that regulatory sandbox might bode well for crypto’s mass adoption.