Wealthsimple Crypto launches wallet support

Wealthsimple’s latest move in the cryptocurrency space is one the FinTech startup said has been much requested by its users. As of November 10, the company has added the ability for users to deposit cryptocurrencies from external wallets into Wealthsimple Crypto.

Wealthsimple had been beta testing the feature since the end of October prior to announcing its public launch. The wallet feature allows users to transfer Bitcoin and Ethereum from external wallets into their Wealthsimple accounts. Wealthsimple also plans to allow for withdrawals in the coming weeks, and to add the capability for more cryptocurrencies at a future date.

A spokesperson for Wealthsimple called this the first step in the company moving from a closed-loop system to one that allows for functionality around external wallets.

“This is an important step in taking our crypto platform from a closed-loop system, to a platform that gives our clients the ability to explore the different applications and opportunities of crypto,” Wealthsimple noted in a statement to BetaKit. “For many people, having direct control over their digital assets is a huge part of cryptocurrency’s value proposition. They want the autonomy to control their assets directly, without needing to trust centralized intermediaries. And the only real way to have that autonomy is with a crypto wallet.”

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Wallets are a key part of accessing and managing crypto assets; they allow users to send, receive, and spend their cryptocurrency. When crypto is purchased on a trading platform users are often given the option to store the ‘keys’ to their coins in an account, or move that currency off the platform into a personal crypto wallet. Hot wallets are ones connected to the internet, while cold wallets are offline devices.

Wealthsimple does not currently hold any cryptocurrency as it does not have its own wallet product – unlike Coinbase, which has created a Coinbase Wallet in addition to its trading platform. Wealthsimple Crypto’s assets are custodied at Gemini Trust Company, a popular cryptocurrency exchange and custodian created by the Winklevoss brothers, and regulated by the New York State Department of Financial Services.

“Introducing wallets — and with it transfers — will give our clients the ability to use their assets to interact with different blockchain applications like NFTs, gaming, decentralized finance and more,” Danish Ajmeri, head of crypto at Wealthsimple, told BetaKit. “We also know self-custody is also an important principle in crypto and we want to support that ethos by allowing clients to do it, while educating them along the way.

Wealthsimple has been in the crypto trading space since 2020, and has received conditional approval from the Canadian Securities Administrators (CSA), through its Sandbox program, to test its crypto trading platform for a period of two years. The platform was the first to be regulated in Canada. More recently a handful of other Canadian crypto trading startups have also worked with regulators for exemptions.

RELATED: Non-committal on a banking license, Wealthsimple CEO Michael Katchen says company’s ambitions extend “beyond Canada”

The expansion into crypto was part of a broader diversification of Wealthsimple’s product suite. Since launching six years ago with a focus on low-fee robo-advising, Wealthsimple has expanded to offer savings accounts, buying and selling of stocks, tax filing, and most recently crypto. A recent Globe and Mail article called into question whether Wealthsimple has shifted away from its founding idea of passive and easy investing, pointing to the difficulties of turning a profit for companies solely focused on robo-advising.

The move into crypto has proven to be impactful for Wealthsimple, coinciding with the company’s biggest period of growth to date. Amid the GameStop trading frenzy in January, Wealthsimple’s trading platform reached number one overall on the Canadian Apple App Store after beginning the new year ranked 39. The company also saw a 50 percent increase in sign-ups and doubled trading volume.

With $15 billion in assets under management across its financial offerings and more than two million users, Wealthsimple secured a $750 million CAD ( $250 million in primary capital) financing round in May at a post-money valuation to $5 billion CAD.

Wealthsimple co-founder and CEO Michael Katchen called the investment at the time a “resounding vote of confidence,” noting Wealthsimple has plans to bring more financial products to market.

When asked what trends Wealthsimple is tracking in the crypto space, Ajmeri noted the company is exploring and researching areas like DeFi and NFTs. “Our goal is to help make crypto more accessible in a safe and responsible way, while making updates to our ecosystem with the future of cryptocurrency in mind,” he said.

UPDATE: This article previously stated that Welathsimple’s assets under management are $9.7 billion, this has been updated based on new details from the company.

Meagan Simpson

Meagan Simpson

Meagan is the Associate Editor for BetaKit. A tech writer that is super proud to showcase the Canadian tech scene. Background in almost every type of journalism from sports to politics. Podcast and Harry Potter nerd, photographer and crazy cat lady.