Security and Regulations at Coinsquare
When it comes to dealing with assets, digital or otherwise, security is paramount. Moreover, working in a decentralized market – like we do with cryptocurrency – begets a need for structure and regulations. Coinsquare values and respects the need for both. With an industry-leading Compliance Program, robust security protocols, and a transparent approach, Coinsquare has developed a client-focussed approach to security and regulations in Canada.
We know first hand and fully appreciate the challenges and complexities involved in operating a digital asset trading platform in this market. Coinsquare has moved in a slow and deliberate way in order to protect ourselves and our customers from issues like those faced by other exchanges. Our preference has been, and will continue to be, to move strategically in advancing our business to ensure the health of our company and in turn the security of our clients’ assets.
In order to ensure our clients’ assets are secure, Coinsquare stores over 97.5% of its digital assets in cold storages dispersed across multiple locations. Access to said cold storage and Coinsquare’s servers is strictly controlled, with strong encryption and hardware key devices following the industry’s best practices. These private keys (the hardware) are also recoverable through a strict disaster recovery plan, should it ever need to be executed. Notably, Coinsquare does not rely on a single individual to protect the safety of our clients’ assets.
Coinsquare’s internal protocols ensure that all assets and liabilities are systematically checked on a recurring basis to ensure the timely detection of anomalous activities and potential issues. Withdrawals are also manually confirmed by our staff, who, on both a pre and post trade basis, monitor the platform and their clients to identify (and report) suspicious activities. Coinsquare maintains a reserve ratio of no less than 110% of client assets over its liabilities, at all times. The company also conducts internal financial audits, and is subject to external independent third-party audits.
Coinsquare is proud to have banking relationships with a number of Schedule 1 Canadian banks, including one of the Big Five. Our strong banking relationships are built on trust and an overwhelming commitment to compliance controls, ensuring that our clients’ assets are not at risk of being frozen. Coinsquare has developed an industry leading compliance program, including an anti-money laundering and anti-terrorist financing program (“Compliance Program”) that is second to none. Coinsquare is one of the few firms globally to have successfully completed an independent third-party review of its Compliance Program.
Notwithstanding the fact that regulations in the digital asset space are quite limited, Coinsquare has taken on the cost of developing and implementing its Compliance Program in anticipation of upcoming regulations in Canada and the United States. Unlike many competitors, Coinsquare is in it for the long haul, and has made many decisions to turn away a great deal of business in order to remain focused exclusively on legitimate trading and related activities.
We do not hide from regulators – we reach out to them and provide our recommendations to ensure that the ultimate cryptocurrency market will thrive. Coinsquare has forged strong relationships with the applicable regulatory authorities in both Canada and the United States. In fact, we are looking forward to being registered as a regulated securities trading platform in Canada and in the US in the near future. While we continue to remain focused on the Canadian market to ensure we do not lose our leadership position, we are aggressively looking to scale our soon-to-be regulated trading platform in other jurisdictions.
The creation of compliance with regulators will be very beneficial to the future of cryptocurrency trading. Aside from security and accountability, regulations and regulators could seriously assist in market growth and consistency across trading platforms. Coinsquare has been a willing and frequent collaborator with all levels of regulators and enforcement agencies on a cross-border basis when it comes to identifying and preventing unscrupulous activities on the trading platform. We take great pride in our ability to effectively partner with these agencies and organizations to stop manipulative activities before they happen.
Coinsquare’s Position In The Market
Coinsquare’s position in the digital asset market in Canada is unmatched. Coinsquare was recognized as the leading Blockchain company in Canada at the 2018 FinTech and AI Awards, named by LinkedIn Canada’s #2 startup, and as one of LinkedIn Canada’s top technology companies. We have created synergies with our regulatory and banking relationships, trust of our market, our strong brand, and a customer base of over 300,000 Canadian registered users. Coinsquare has raised over $60 million from investors, including Fidelity Investments Canada’s funds, Canaccord Genuity and Cormark Securities have represented Coinsquare in previous financings, and completed their own diligence on the company before inviting their investor base to participate in our financing rounds. Coinsquare is extremely well situated from a technological, regulatory and financial perspective to lead the digital asset industry both in Canada as well as globally.
As most businesses face challenges when their market faces challenges, Coinsquare is no different. Coinsquare’s explosive growth also created several challenges: Coinsquare is a startup with multiple new lines of business that remain in their testing period while we evaluate their ability to scale. Not everything we work on succeeds, and not everyone we bring into the business is a fit. With market headwinds, the advancement of our new business units is even more challenging. We have changed the way we operate, and we have scaled down some investments to ensure we have more than enough runway to allow for market conditions to improve. The company remains incredibly positive about the likelihood of success across our wide range of newly tested business units.
Whether in cryptocurrency trading or other investment platforms, Canadians should be aware of their asset security. Coinsquare has invested heavily in building a trusted offering for our clients. We understand people trust us with their hard-earned money, and we take that very seriously. We look forward to continuing to lead in Canada and beyond. We are on a mission to change the world. Come join us.
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