Thank you, and good morning.
I'd like to thank the committee for undertaking this study as well as for inviting me to comment in the context.
My name is Adam Garetson, and I am general counsel and chief legal officer of WonderFi Technologies Inc., a publicly traded TSX-listed company. We employ over 85 people in Canada. We have over a quarter of a billion dollars in client digital assets under management, and over $6.5 billion have traded in digital assets over our platform to date.
WonderFi primarily allows our users to participate in the buying and selling of digital assets that are based on blockchain technology. WonderFi owns and operates two crypto asset trading platforms, or CTPs, that are registered with the Canadian Securities Administrators, mainly Bitbuy Technologies Inc. and Coinberry Limited.
As a little bit more about me, I have previously served as director and senior counsel at RBC Capital Markets, where my focus was on investment banking and global market trading. I also practised securities law in the Toronto offices of Blake, Cassels & Graydon for a number of years prior to that. I have previously served as a committee member of the Canadian Bankers Association securities legislation specialist group.
I am very honoured and happy to be here speaking to you all today.
In my view, it is highly unlikely that digitization is slowing down or going away in the future. I strongly believe that digital assets are here to stay and will, over time, replace a wide variety of traditional assets. Related thereto, blockchain technology will replace legacy infrastructure.
I've often heard blockchain characterized as “a solution looking for a problem”. The technology certainly has a wide range of potential use cases and has found applicability and significant adoption in the financial services sector, where WonderFi and some of the other panellists here today participate. I see blockchain as the infrastructure technology that has the potential to underlie a number of different use cases, including virtual currencies and other digital assets, the most prominent of which is bitcoin.
Regulation, to me, drives investor confidence. It backstops the development of a reliable infrastructure, and here in Canada, as you've heard already, we have the opportunity to be, and continue to be, a global leader if we get the regulation right. We've seen this initially through the adoption of regulation over crypto assets by the Ontario Securities Commission and the other provincial securities commissions with respect to digital assets. That's helped provide stability to the Canadian cryptocurrency trading sector through a recent period of heightened market volatility in the space.
In short, we need a made-in-Canada solution for digital asset market infrastructure, and our company is diligently working on it. Related to that, industry partnership with legislators to ensure the establishment of coherent regulation for blockchain technology is paramount, primarily in ensuring user adoption of compliant and regulated products, which is, in my view, the best way to combat bad actors in the space. Effectively, that means we incentivize the use of compliant products through assurances provided by regulation.
While my focus on blockchain is in the context of financial services, in my view it's important to take a broader long-term view of the technology itself, as opposed to any one sector or asset. Overly burdensome approaches to regulation run a significant risk of stifling Canadian innovation, such as by lumping low-risk applications of the technology in with more high-risk speculative activity or inadvertently providing monopolies on the development to more traditional players that can afford costs associated with adhering to undue burdens.
Inconsistent application of regulation can also be potentially problematic. Some existing laws may apply already and can be layered onto blockchain-related activity, whereas in other places there may be legislative gaps.
We should also look to what other regulators are doing around the world to achieve a measure of consistency. With respect to blockchain technology and digital assets layered on top of that, I would encourage the committee to take an approach to regulation that leverages existing laws and provides modification to existing rules where necessary, and not attempt to legislate via one fell swoop. That approach, in my view, is cumbersome and frankly unfit to keep pace with a more rapid evolution of the space and the technology.
Paired with regulation of the industry comes a requisite for enforcement, primarily against non-compliant actors. That would be particularly those who operate on an offshore and unregulated basis. I'd also like to advocate dedicated financial and human resources for enforcement in this space, including at the level of provincial securities regulators.
I thank you for your time today. I'm happy to expand on these and other topics through questions.