Tag Archives: crypto

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.

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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.”