Tag Archives: bitcoin

Canada’s first regulated custodian of crypto assets: The Calgary fintech startup Tetra Trust

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.

Nova Scotia’s Crypto owner’s Exhumation Is Requested

Lawyers of Quadriga CX’s users are requesting Canadian government to do the exhumation of late Gerald Cotten to make sure it’s really him.

Last year Cotten has passed away while on a trip to India. He ran the biggest crypto fund in Canada. He was the only person in his company who knew the password to all the crypto funds. Since he has passed away noone can cash out more than $250m in funds.

The exchange had more than 100,000 users. Nova Scotia’s Supreme Court had issued a Termination and Bankruptcy Assignment Order earlier this year outlining the bankruptcy proceedings.

Pursuant to the Order of the Supreme Court of Nova Scotia, issued February 28, 2019 (the “Representative Counsel Appointment Order”), Miller Thomson LLP and Cox & Palmer (together, “Representative Counsel”), were appointed as Representative Counsel on behalf of users affected by the shutdown of the Quadriga CX cryptocurrency exchange platform (collectively, the “Affected Users”).

The purpose of this letter is to request, on behalf of the Affected Users, that the Royal Canadian Mounted Police (the “RCMP”), conduct an exhumation and post-mortem autopsy on the body of Gerald Cotten to confirm both its identity and the cause of death given the questionable circumstances surrounding Mr. Cotten’s death and the significant losses of Affected Users.

Enclosed please find a detailed compilation (the “Background Material”, at Schedule “A”) of publicly available information on the history of Quadriga, Gerald Cotten and others related to Quadriga which, in our view, further highlight the need for certainty around the question of whether Mr. Cotten is in fact deceased.

Representative Counsel respectfully requests that this process be completed by Spring of 2020, given decomposition concerns.

The Background Material has been created from publicly available information on the Quadriga matter.

Should the RCMP require anything further, Representative Counsel is available to assist.

avatar

MILLER THOMSON LLP

Letter to the RCMP

The lawyers for the users have sent a letter to RCMP asking the RCMP “to confirm both its identity and the cause of death given the questionable circumstances surrounding Mr. Cotten’s death and the significant losses of Affected Users.”

The exchange had the money stored in “cold wallets”, a way to protect them from hackers. But since Cotten had the passwords noone else can access them.

The letter from the lawyers also outlined “the need for certainty around the question of whether Mr. Cotten is, in fact, deceased.”

Vancouver Potentially Cracking Down on Bitcoin ATMs

Police in Vancouver say that Bitcoin ATMs are used for money laundering and must be stopped. Vancouver Mayor agrees with them. Bitcoin users say that federal rules need to be set for bitcoin across Canada.

Unlike banks and money lending services, bitcoin machines are not covered by federal anti-money-laundering regulations.

“Regulate the use and operation of cryptocurrency ATMs, including the requirement for a business licence, requirement for signage to advertise common frauds, requirement for identifications to be used to verify the sender and receiver of funds and requirement of security features.”

Vancouver wants to pass this municipal bylaw soon

Some people might be using bitcoin ATMs to launder money, but many others use it for legitimate purposes.

Police in Vancouver say that many of these machines are used to commit fraud.

There are more than 60 bitcoin ATMs in Vancouver area.

If you have bitcoin or ethereum accounts with coins in it – you can use ATMs to withdraw the money. Typical fee is around 9% to take out the money.

Vancouver is calling for federal government to step up and regulate bitcoin ATMs to make sure they are covered by anti-money-laundering.

Some machines advertise $1,000 or $3,000 limit. Some others do not have any limits at all.

Nova Scotia Crypto-Exchange Can’t Pay Investors $250m after its CEO’s Death

Canadian firm Quadriga CX based in Nova Scotia says it will not be able to pay its customers and investors the $250m because its CEO, Gerald Cotten, died while on a trip to India.

The company says Cotten was the only one who knew the passwords and security keys to the company’s funds.

The Supreme Court of Nova Scotia on Tuesday approved protection againsts creditors for 30 days court filings revealed.

Investors and customers were furious when they found out that they were not getting paid and found the whole ordeal very suspicious as the company has $250m in their accounts.

In a note on Facebook , company and Cotton’s wife said that Cotton died while on a trip to India to open an orphanage. Cotton’s wife said that he always used secured and encrypted laptop and no matter how hard she searched she was not able to unlock it.

This is the first ever a company “loses” so much money it owns to its investors and clients due to one person losing digital keys.

Frustration Grows

Frustrated investors took to Twitter and claim that this might be the biggest scam ever when it comes to digital investments.

https://twitter.com/ProofofResearch/status/1092114818449002496
https://twitter.com/ProofofResearch/status/1092114819401039872
https://twitter.com/ProofofResearch/status/1092114820839731201

Some people twitted their frustration because they lost so much money

When company’s exchanged closed they had close to 63,000 users with over $180 million in cryptocurrency and $70 million in Canadian dollars.

One user invested as much as $70 million dollars.

Something does not add up

What’s even more interesting Cotten signed a will few months before his death designating his wife (whom he married just few months before his death) to be the executor of his real estate. He has also assigned $100,000 to make sure someone would take care of his two pet dog chihuahuas, Nitro and Gully. He had also owned an airplane and some housing in British Columbia and Nova Scotia, according to The Globe and Mail investigation.

To add to the mystery the Indian state of Rajasthan published certificate of his death but declined to provide any further comment. On the death certificate Mr Cotten’s name was misspelled as Cottan.

Some people also dispute the reason for his death – officially claimed as Crohn’s decease, inflammatory bowel disease, some say it is very rare to die from. According to doctors, patients with Crohn’s decease have 97% survival rate if they follow a proper treatment plan.

In Conclusion

Dean Skurka, VP for finance and compliance at Canadian cryptocurrency platform, bitbuy.ca, said that he thinks with cases like this “highlights the need for regulation” of crypto exchanges to make sure things like this will not happen in the future.

Quebec Cracks Down on Cryptomining

Quebec is putting breaks on cheap energy to cryptominers after initially selling their energy at dirt cheap rates, that would make Quebec’s neighbor to the East jealous.

Quebec has allowed rates of 5 cents per kw hour to be sold to energy hungry miners. Where as rates for electricity in neighbouring Ontario for local residents can creep up to 15 cents per kw hour.

Regie de l’energie has changed their tune and now upped the rates from 5 cents to 15 cents for new clients. Existing clients will enjoy their cheap rates for now. With bitcoin prices collapsing every day, it will be interesting if they could afford the increased pricing.

After searching for more clients for their cheap energy, Hydro Quebec, has found itself in a dilemma, they have found hundreds of bitcoin and crypto miners clients wanting to take all their energy after ban in Asia.

Life-Of-Pix / Pixabay

Hydro Quebec Jonathan Cote said in an interview to Globe and Mail:

“We don’t want to send a message to the market that this is the price for cryptocurrencies in Quebec.

It’s more that requests are suspended until we have the proper framework determining conditions for that market.”

You can have access to the full documentation on how Quebec plans on tackling cryptominers in the province by following link here.

Québec energy minister Pierre Moreau said:

“The measures announced today represent a responsible, prudent and practical approach to welcome top businesses from the blockchain tech sector, to contribute to the economic development of other sectors and to create spinoffs throughout Québec, while ensuring energy supply for all Quebecers.”

Economic development? Hydro-Québec commissioned the firm KPMG to analyze the economic spinoffs of the cryptocurrency mining sector. The study reveals that unless it is associated with additional activities, cryptocurrency mining does not generate many jobs.

Quebec Considers Restrictions Against Cryptominers

Government of Quebec has finally woken up by putting a stop on cryptomining in Quebec by temporary suspending sale of electricity to miners of crypto currencies.

Quebec’s super cheap hydro rates attracted hundreds of crypto-miners from around the world. China and South Korea have recently banned mining and threaten companies to cease all operations.

As recently as few years ago Hydro Quebec was looking to get potential clients to come to Quebec. But now it seems they have to turn away clients. Crypto miners are seeking 15,000 megawatts which accounts for over 40% of Hydro Quebec capacity and Hydro Quebec states that is not feasible for them to sell so much.

Hydro Quebec recommends only 500 megawatts to be allocated for crypto miners.

Régie de l’énergie, the Quebec’s energy board, need to come up with rules how to allocate thousands of megawatts being requested by crypto miners. Should they allow unlimited energy, limit it or restrict it all together?

If all requests from crypto miners are accomodated, Hydro Quebec would need to buy extra power or build new capacity, therefore increasing rates for all Quebecers.

Hydro Quebec spokesman Jonathan Cote said in an interview with Globe and Mail:

”If we had to build new capacity or buy extra power, then the rates for everybody in Quebec would go up because of this. This is something that we can’t accept. We need to protect the rates of all our customers.”

Provincial government and Hydro Quebec recommend crypto projects are selected on how many jobs would be created and price for power. They also recommend limiting power sold during winter months when most energy is used.

The study will be concluded pretty quickly as early as September since Quebec does not want to lose out on such lucrative business opportunity.

KFC Started To Accept Bitcoin in Canada (no punch line)

Get your bitcoins – fried chicken is waiting for you. It will cost you .0011204 BTC to get a bucket which includes 10 Original Recipe Tenders, Waffle Fries, Med Side, Med Gravy and 2 Dips. You can invest your hard earned mined bitcoins into something that will definitely be finger licking good.

Yes this is not a joke. KFC has started accepting bitcoins for their bitcoin buckets.

Meditations / Pixabay

KFC calls it a BitCoin Bucket:

THE BITCOIN BUCKET

Welcome to 2018, Canada.

Despite the ups and downs of Bitcoin, the Colonel’s Original Recipe is as good as always. So, trade your Bitcoins for buckets and invest in something finger lickin’ good.

*The Bitcoin Bucket is a limited time offer. A lot of you want to buy in Bitcoin, which means we keep selling out. Keep on checking in for restocks of this Bucket. Craving chicken now? Our Original Recipe is available for purchase and delivery with old fashioned people money at www.kfc.ca (participating locations).

It might be surprising that KFC is one of the first restaurants to start accepting bitcoins, but if you look it at from marketing perspective it is quiet genius. They do a limited offer run and increase awareness of their restaurant especially with millennials.

Engin_Akyurt / Pixabay

Just be careful though throwing your bitcoins around. Few years ago, a developer spent 10,000 bitcoins to order 2 pizzas. If he kept the bitcoins it would be worth over $100 million dollars. Hope he got at least some extra cheese with those pizzas.

Still have too much bitcoin and nothing to spend it on? Soon, bitcoin ATMs will be popping up around Toronto, and you can withdraw your hard earned cash there.