Bitbuy’s next step: bring more coins onto the regulated platform
Toronto-based crypto company Bitbuy Technologies Inc. is set to announce Wednesday that it has received registration approval from the Ontario Securities Commission (OSC), making it the first registered marketplace that is also a brokerage of crypto assets.
Bitbuy was formed in 2013 as a trading platform before pivoting to become a marketplace in November 2019, merging the broker dealer business with a market infrastructure. Michael Arbus, Bitbuy’s chief executive officer, told the Financial Post that the marketplace element sets them apart from other Canadian crypto trading platforms that function solely as a brokerage or have crypto as a feature on a larger business model.
Arbus described that marketplace has buyers and sellers meeting and agreeing upon a trade. Once their prices match, the trade goes through. However, a broker would go through a third party when making the transaction.
“(Consumers) never know about pricing or transparency. They have no control over the price that the other side is giving them,” Arbus said. “In our opinion, people deserve more. So, when we made a decision to go marketplace, it came with a few other big tasks as well.”
These include building out a larger tech company with compliance and technology staffing and infrastructure, as well as filing extra paperwork.
Arbus said that he and Bitbuy’s president, Dean Skurka, held numerous consultations with regulators before March 29, when a joint announcement from the Canadian Securities Administrators (CSA) and the Investment Industry Regulatory Organization of Canada (IIROC) set out guidelines for crypto-asset trading platforms.
Since then, he said, they have grown from 25 people to 85. “It’s an extremely busy time for our platform,” he added.
During that period, the company took regulatory feedback and answered questions on its processes such as buying and selling, foreign exchange and onboarding new crypto assets.
While Skurka wouldn’t speculate on their reasons, he noted that some of the largest crypto players chose to leave Canada after the regulatory framework was rolled out.
“This framework is quite innovative and unique, and also requires a lot more work than what might exist in other jurisdictions,” Skurka said. “Internally, we refer to this as a regulatory moat being put around Canada … to protect our citizens from what’s happening globally.”
Now that Bitbuy has cleared the OSC approval process, Arbus said the company’s goal is to bring more tokens onto the platform and expand trading volumes.
In a world where alternative crypto assets pop up seemingly every quarter, adding new coins is something they don’t take lightly. If a coin is going to enter their platform, Skurka said, it would have to be something that the company executives could stand behind.
“You’ll never see us listing Squidcoin even if it were to meet our internal regulatory committee process … because we could never stand behind something like that,” Skurka said, referring to a token that was subject to a recent “rug pull” in which its creators absconded with investor money.
Skurka added that the company’s committee has a set of criteria that assets have to meet, including where else the coin is listed (and those exchanges are then assessed for their credit worthiness and regulatory status), regulatory reports on the coin and the nature of the coin.
With more crypto arrows in the quiver, Arbus hopes regulation and more products could set the stage for Bitbuy’s expansion in the next year.
“We get approached quite frequently from much larger businesses than us that have ignored Canada, that love what we’re doing on the regulatory front, that love the polish that a Canadian regulated entity will bring to the world,” Arbus said. “We can absolutely see that probably at some point within 2022, we will have something to say on the global front.”
Source: Financial Post