Cold storage of Bitcoin theoretically reduces the risk of theft in the event of a security breach. The sub-custodian will use segregated cold storage Bitcoin addresses for each fund which are separate from the Bitcoin addresses that the sub-custodian uses for its other customers and which are directly verifiable via the Bitcoin blockchain.
The sub-custodian is also responsible for providing each fund, on an annual basis, a SOC 2 type 2 Report in respect of its internal controls during the course of the applicable calendar year, which report will be made available by the applicable manager for review by the fund’s auditors in connection with the audit of the fund’s annual financial statements. A SOC 2 type 2 report is an internal controls report intended to demonstrate how well a company safeguards customer data and how well those controls are operating.
- Canadian regulator clears launch of world’s first bitcoin etf
- Canadian clears launch world first bitcoiner
- Canadian clears launch world first bitcoins
- Canadian clears launch world first bitcointalk
- Similarities Between the Purpose Fund and the Evolve Fund
- Fidelity’s crypto platform greenlit by Canadian regulator
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Canadian regulator clears launch of world’s first bitcoin etf
Bitcoin notched a record high of $48,975 on Friday. It has gained about 63% so far this year and soared roughly 1,130% since mid-March 2020.
Elon Musk’s Tesla revealed on Monday it had bought $1.5 billion worth of the cryptocurrency and would soon accept it as a form of payment for its cars, while the cryptocurrency has been gaining acceptance among mainstream financial firms.
In the United States, eight firms have tried without success since 2013 to create a bitcoin ETF, according to Todd Rosenbluth, director of ETF and mutual fund research at New York based CFRA.
Among issues the Securities and Exchange Commission appears to be focused on are the potential for market manipulation and the process of custody audits that verify that a fund holds its purported assets.
“While some expect that a Canadian ETF approval sets the stage for a near-term U.S.
MacKenzie added that:
“Fidelity Clearing Canada is pleased to offer our new solution, leveraging Fidelity’s global experience and deep knowledge of digital assets for leading Canadian institutional investors.” Those interested in using FCC’s cryptocurrency custody and trading services can now do so as the solution has already been activated for portfolio managers and distributors, mutual funds, ETFs, and other qualified institutional investors, according to the operator.
On The Flipside
- A study conducted by the firm recently determined that around 70% of Canadian institutional investors are considering acquiring digital assets in the coming months.
Why You Should Care?
- The platform has stood out as one of the leaders of the adoption of cryptocurrencies since 2020, not only in Canada, but in the U.S.
Canadian clears launch world first bitcoiner
On February 16, 2021, the price of one Bitcoin traded above US$50,000 for the first time, in response to increasing institutional adoption of Bitcoin as well as significant interest from retail investors. Reflecting the growing acceptance of Bitcoin, Canadian securities regulators recently cleared the prospectuses of the world’s first two exchanged traded funds (“ETFs”) dedicated exclusively to acquiring and holding Bitcoin.
On February 11, 2021, the Ontario Securities Commission (“OSC”) issued a receipt for a final long-form prospectus of Purpose Bitcoin ETF (the “Purpose Fund”), providing regulatory clearance for the first ETF dedicated to buying and holding Bitcoin for long-term appreciation.
Canadian clears launch world first bitcoins
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Canadian clears launch world first bitcointalk
Each fund also undertook to the OSC to, so long as it is a reporting issuer, obtain from its custodian or sub-custodian: (1) an annual service auditor’s report (SOC 2 type 2 report) and (2) written confirmation from the custodian or sub-custodian to permit the fund’s auditor to test its internal controls in connection with its audit of the fund’s annual financial statements in any year when a SOC 2 type 2 report is not obtained.
The manager of each Fund conducts due diligence on each proposed trading platform or over-the-counter counterparty from which Bitcoin will be purchased, which includes confirming that the relevant source maintains appropriate know-your-client policies and procedures.
As Canadian regulators have now cleared the launch of Bitcoin-focused ETFs and such funds are becoming more prevalent in the Canadian capital markets, attention will shift to the U.S. Securities and Exchange Commission and whether it will similarly clear such ETFs in the U.S.
On February 11, 2021, The Bank of New York Mellon, the oldest bank in the U.S., announced that it will hold, transfer, and issue Bitcoin and other cryptocurrencies on behalf of its asset-management clients.
Bitcoin mutual funds and ETFs as well.
Canada’s financial regulator has approved the launch of the first institutional digital asset service in the country by Fidelity Clearing Canada (FCC). As a result, Fidelity has become the first Bitcoin trading and custody platform specifically designed for institutions.
Having received authorization from the Investment Industry Regulatory Organization of Canada (IIROC), the new service will be fully focused on cryptocurrency operations.
The approval came after the company reported considerable growth in the demand for digital assets from Canadian investors.
The Canadian government had laid the groundwork for this move months prior when it authorized the operations of a set of Bitcoin ETFs.
This article highlights the growing popularity of Bitcoin and the recent launch of the world’s first Bitcoin ETFs in Canada.
Information contained in this article is based on public disclosure.
Similarities Between the Purpose Fund and the Evolve Fund
The two ETFs cleared for launch by Canadian securities regulators share a number of features, beginning with their objectives. The Purpose Fund was created to buy and hold substantially all of its assets in long-term holdings of Bitcoin to provide holders of its units with the opportunity for long-term capital appreciation.
The ETF will be the first in the world to invest directly in physically settled Bitcoin, not derivatives, allowing investors easy and efficient access to the emerging asset class of cryptocurrency without the associated risk of self-custody within a digital wallet. Similar to physically backed gold or silver products, the ETF will always be backed directly by physically settled Bitcoin holdings.
Bringing the first Bitcoin ETF to the market brought many unique challenges including the requirement of daily liquidity and various mechanisms to satisfy adherence to standards within both traditional ETF markets and the digital asset industry.
Bitcoin holdings are kept in “cold storage” – the most secure custody solution in the market.
The move comes as the firm stated that the demand for investing in digital assets had grown considerably.
Fidelity’s crypto platform greenlit by Canadian regulator
Fidelity Clearing Canada, a subsidiary of mutual fund giant Fidelity Investments, has received regulatory approval to launch the first digital asset trading and custody solution for institutions in the country. Pension funds, portfolio managers and mutual funds could easily leverage the new platform to invest in crypto assets.
At the same time, Fidelity also filed to launch two Bitcoin funds in Canada, a BTC exchange-traded fund (ETF) and a mutual fund tied to the leading cryptocurrency. The prospective ETF would utilize the firm’s custodian services.
The world’s first Bitcoin ETF launched in February this year.