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Education series: Custody in Canada vs. Abroad

Canadian Digital Asset Industry: Are Consumers too Exposed to Foreign Jurisdictions?

FOR IMMEDIATE RELEASE

Toronto, Canada – August 12, 2024 – This is the single most important question that Canadian consumers should be asking themselves: Where are my assets? In a call for action, Didier Lavallée, Chief Executive Officer of Tetra Trust–Canada’s first and only licensed digital asset custodian in Canada–is shedding light on the potential increasing risks faced by Canadian consumers in the digital asset industry due to the overwhelming influence of foreign custodians.

With over 89% of Canadian-owned digital assets being held by foreign custodians, and 90% of Bitcoin and Ethereum US ETFs being controlled by a single foreign entity, the Canadian digital asset market faces significant systemic risks. This dependency on foreign custodians could potentially jeopardize the security and rights of Canadian consumers.

“We must prioritize the safety of Canadian consumers and bring these critical issues to the forefront,” says Lavallée. “It’s imperative that we acknowledge the concentration of risk and the systemic vulnerabilities that come with it. Canadian consumers deserve to know where their assets are held and the potential risks involved.”

The current regulatory environment allows for inconsistency, unlevel playing field and conflicts of law, leaving Canadian investors exposed. Despite extensive discussions with key industry stakeholders, the response has been insufficient, perpetuating the problem rather than addressing it.

The average consumer is likely unaware of this exposure.

“We are committed to fostering a transparent and fair marketplace,” he added. “It’s time for the industry to be honest about where consumer assets are held and the risks involved, especially when these assets are exposed to foreign regulatory environments.”

As part of a broader strategy to engage with the public and regulatory bodies, Tetra Trust will continue to advocate for uniform regulations that prioritize the protection of Canadian consumers. This initiative marks the beginning of a more public and pointed approach to addressing these critical issues.

The forthcoming educational video launches on August 12, 2024 by raising some important concerns and questions, which are crucial to the creation of an innovative, yet sound and regulated digital asset ecosystem in Canada:

  • Why should one care as to where the assets are custodied, and by whom or which organization, from a security and business continuity perspective? 
  • How Canada distinguished itself early on in terms of digital asset regulation, and what are the risks facing our industry moving forward? 

Public Interest Issues: The reliance on foreign custodians raises public interest issues, including:

  • Asset keys being held in foreign jurisdiction. 
  • Different and inconsistent regulatory standards.
  • Limited reach of Canadian regulatory authorities into foreign jurisdictions. 

For more information, please contact: sales@tetratrust.com

About Tetra Trust

Founded in 2019, Tetra is Canada’s first licensed digital asset custodian. Our platform provides enterprise-grade custody of digital assets for institutional clients. Backed by WonderFi, Urbana Corporation, Canadian Securities Exchange, Icebook Investments Corp and Coinbase Ventures, Tetra provides a solution to one of the last remaining problems preventing institutional adoption of the digital asset industry–custody.

Led by a first class team of security, product, and business experts and a board of directors with extensive trust company experience, Tetra delivers the most advanced digital asset solutions in the industry.

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