ETHC on Parliament Hill 🇨🇦 + In the News 🗞️ 🚀

The Finance Committee met earlier this week to study the Federal government’s invocation of the Emergencies Act — and we were invited! 🥳Here’s a recap from Monday’s session in the House of Commons 🏛️

The three-hour hearing largely focused on how the Emergencies Act and related measures impacted the cryptocurrency industry and Canadian investors. 💵

For context: On February 14, the Federal government invoked the Emergencies Act that led to several wallets and exchange accounts being frozen 🥶 to try and halt bitcoin donations that were funding the ongoing trucker protests. 🚚 🚫

In our opening statement, we acknowledged that recent events have put cryptocurrency in the spotlight 🔦 after many years of being pushed aside by regulators. This is despite the fact one in four Canadians 🇨🇦 hold cryptocurrency and 37 per cent say they intend to purchase some in the near future, according to a recent survey. We explained to the committee that it’s clear Canadians want access to this cutting-edge technology in a safe and compliant way. ✅ 💡

“This asset class is here to stay, and it’s likely going to be orders of magnitude bigger within the next decade,” said Ether Capital’s CEO Brian. 🎙️ “There’s an opportunity for Canada to lean into this industry. It has grown from essentially nothing into multiple trillions of dollars.” 💸 📈

The Liberals, Conservatives and the NDP asked constructive questions to the witnesses, including specific legislative recommendations, that would allow the industry to operate and thrive coast-to-coast. 🍁 🌊

We believe that a key 🔑 objective is ensuring Canada remains competitive with foreign businesses. Currently, there are limited investment options, which forces Canadians to seek 👀 access to new offerings in more permissive jurisdictions 🌎. This is not just a lost economic opportunity, but makes it more challenging when it comes to oversight of these products.

It wouldn’t be a proper parliamentary session without some opposition! 🧨

Although the hearing was mostly about how the technology works and opportunities it presents, MPs did raise concerns about the industry’s “secrecy and transparency.” 🥷

Bloc Québécois MP Gabriel Ste-Marie also expressed skepticism about cryptocurrency in general. He spoke in French, but here’s an English translation of what he said:

“I have reservations regarding crypto…I have a fear about recognizing them as legitimate currency and making them a legal currency…At this point they are assets and purely speculative…”

Many people believe cryptocurrency is used in illicit ways, which is a haunting reputation from the Silk Road era 😱. Today, the technology is much more sophisticated 🧐 because all activity that occurs on-chain is recorded and available to the public. Blockchains are called distributed ledger technology for this very reason. Every new block 🟦 filled with transactions that gets added to the chain 🔗 must correspond with the previous block, so there’s proper record and documentation that transactions occurred. 📝

When it comes to the so-called Freedom Convoy, the CBC quoted Brian Mosoff who explained that those who donated from self-hosted wallets 👝can still be tracked — even if the funds weren’t frozen. This is because the platforms that are regulated, or in the process of becoming regulated, can work with officials to monitor for unusual activity. 🕵️ As soon as addresses and wallets that are red flagged 🚩 interact with regulated platforms, it becomes traceable. 👣

There’s also new software and companies like Chainalysis that work with businesses and government agencies to monitor 🔍 for suspicious activity and ensure those who abuse the network are held responsible for their actions. 👮

Although there are some bad actors in the space, most of the activity that takes place is by people with good intensions who want to participate in this growing industry 🌱 and ensure its success. 🏆

The finance committee agreed to five meetings in total and while cryptocurrency is only a part of the post-mortem on the Emergencies Act, we felt that Monday’s discussion was very constructive and a step in the right direction. 🤝🏿

Most of the parties seemed open and eager to learn more about digital assets. 💡 This will not just benefit the Canadian economy, but will support investors who want more access points and proper guidance. ✅

Overall, we’re optimistic and we hope government officials continue to engage with us and other industry leaders as new regulatory policies take shape. 😎

Both the CBC and The Financial Post reported on the parliamentary hearing and quoted us. 🗞️

The Logic published an article that includes our views on how Canada’s response to the convoy protest put the philosophy behind cryptocurrency to the test. 💡

Wealth Professional also interviewed us about new conversations around cryptocurrency taking place as a result of the war in Ukraine. 🇺🇦

From CeFi to DeFi 🐇 🕳️

It seems like more government officials and traditional finance folks are jumping ship for opportunities in crypto and Web3 — who can blame them? 😉 Michele Korver, former Chief Digital Currency Advisor at FinCEN, is joining a16z after spending 27 years in government and law enforcement.

New Offering From Goldman Sachs 🏦

Goldman Sachs is now offering clients access to an ether fund, according to recent regulatory documents that were filed with the U.S. SEC. With a $250,000 minimum investment, the fund has sold more than US$50 million to 28 clients. The new fund proves there’s institutional investor appetite beyond bitcoin. 🍴

The Merge works! 🚀

Earlier this week, The Ethereum Foundation announced The Merge successfully completed on Kiln — the final boss/testnet before the highly anticipated upgrade takes effect. As a reminder, The Merge is when Ethereum will fully transition from Proof-of-work to Proof-of-stake. Without getting too in-the-weeds, here’s a helpful explainer on how public vs. private networks are used.

A new staking 🥩 protocol that aims to help investors get rewards for locking up their ether just got some new funding. 💰 The team at Swell announced they raised US$3.75 million in a seed round co-led by Framework, IOSG Ventures and Apollo Capital.

The industry is quickly evolving and there’s a lot of information to keep up with. That’s why we want to help! 🦸

Email us your questions and we’ll respond to as many as we can. While we can’t provide investment advice, we do want to steer you in the right direction so you can be informed.

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