Canadian financial services company Wealthsimple revealed that it is set to expand into the cryptocurrency trading space by launching Wealthsimple Crypto.
The new product offering will provide commission-free trading of Bitcoin and Ethereum through a mobile trading app. The Toronto-based FinTech startup has launched Wealthsimple Crypto in private beta and will roll out the product to users by invitation over the coming weeks.
Wealthsimple Crypto will be offered by Wealthsimple Digital Assets Inc., a newly-formed, wholly-owned subsidiary of Wealthsimple Financial Corp that specializes in digital currency services.
The main aim of the new crypto trading platform, according to Wealthsimple co-founder and CEO Michael Katchen, is to remove the many barriers that currently hinder the safe buying and selling of digital assets in the country, and give Canadians access to an “affordable, easy, and secure” crypto product.
As per Wealthsimple’s press release, their Crypto platform will have no minimum account size, offer unlimited commission-free trades, and will not charge for deposits or withdrawals.
Users will also get real-time quotes and withdrawals, while deposits can be made in Canadian dollars.
Wealthsimple Crypto to Be Custodied at Gemini
The cryptocurrency traded on Welathsimple’s platform will be custodied at Gemini Trust Company, a crypto exchange and custodian regulated by the New York State Department of Financial Services.
Katchen called the partnership with Gemini “a big part” of Wealthsimple Crypto’s model, explaining:
“There’s a lot of complexity in delivering crypto securely, and Gemini has become the de facto credible custody platform in North America. They are regulated. They are audited.”
While Katchen noted that Wealthsimple built the rest of the tech behind its crypto trading platform, his startup decided to use Gemini as a third-party custodian, rather than taking years to build out its own such service.
Moreover, the CEO vaguely hinted at future expansion in the crypto sphere beyond trading, saying that he believes it’s important for Wealthsimple to start thinking about the role that crypto is playing in the financial services ecosystem.
The Canadian Crypto Space Faces Some Challenges
Wealthsimple’s launch of its crypto business comes as the financial services startup has been broadening its product base and moving into a variety of new verticals over the past few months.
That said, the move into crypto may prove to be challenging, as the Canadian cryptocurrency trading space has faced some controversies in recent months.
For instance, popular Canadian exchange Coinsquare has been lately accused of “artificially inflating” how much digital currency it trades.
Furthermore, the lack of clarity on how the regulation applies to cryptocurrency has long-affected FinTech startups in Canada, with some officials suggesting the implementation of a “regulatory regime” tailored toward crypto trading platforms.