As the world becomes increasingly open to the currency of the digital world, there’s good news for crypto enthusiasts in Canada. On July 5th, after over an 18 month-long period, a small financial technology startup based in Calgary got approval to provide custody services of cryptocurrency to its institutional investors.
The decision by the Alberta government to approve custody services essentially made Tetra Trust the first Canada-based custodian. Tetra trust will now store the digital assets of investors, in a big win for Canadian crypto development. Tetra trust is spearheaded by Eric Richmond, who also happens to be the chief operating officer at Coinsquare (a trading platform set in Toronto).
With this decision, Tetra closed up a number of financing rounds. While the company chose to keep the exact figures undisclosed, the amount is supported by Mogo Inc., Urbana Corp, and Caldwell growth opportunity firm.
It’s vital to acknowledge the revolutionary nature of this decision. Government recognition and association with crypto storage is a tricky topic. A lot of this hesitation and skepticism stems from the fact that a large user-base of investors are inexperienced young people. The distrust over the crypto industry deepened in 2018 after the death of Gerald Cotten and the subsequent falling-out of the country’s largest crypto exchange: QuadrigaCX. This resulted in investors losing a net sum of 250 million dollars! So it’s not surprising why the government is reluctant to authorize and approve custody services.
So what are Tetra’s plans with this approval going forward? According to Mr. Richmond, the startup doesn’t aim to get high-net-worth folks particularly. Instead, the focus for a client base will be shifted to family offices, mutual funds, and stock exchange. The clients seeking to use Tetra’s services will be expected to store 1 million dollars worth of currency at a fee that the startup hasn’t disclosed.
The other potential competition from within Calgary was Olympia financial group Inc. that backed out of its attempts of becoming a qualified custodian citing “internal risk.”
Mr. Richmond is aiming big with Tetra, hoping for the startup to have over a billion dollars in crypto assets under its managerial wing by the end of 2021.