From the beginning, our mission at Bitbuy has been to provide convenient, dependable and secure access for Canadians to purchase and sell bitcoin and other digital currencies. Over the past two years, Bitbuy has undertaken several initiatives to pursue that mission.
During 2018, Bitbuy retained a Chief Anti-Money Laundering “(AML”) Officer, updated our Know-Your-Customer (“KYC”) Policy, completed audited financial statements for 2016, and 2017, and successfully obtained a Money Service Business (“MSB”) license. In 2019, Bitbuy has enhanced our cold storage methodologies and engaged many third-parties to complement our existing KYC, AML, and Know-Your-Transaction (“KYT”) monitoring tools. These include, but are not limited to Trulioo, KYC2020, and Chainalysis. Our emphasis on safety and security extends beyond these monitoring tools, as we conduct staff-wide AML and Anti-Terrorist Financing (“ATF”) training seminars every month. Our objective is to provide the relevant tools, and educational support to our staff to assist their efforts in detecting fraud and providing adequate service to our end-users.
In the wake of the QuadrigaCX shut-down and subsequent CCAA filing, Bitbuy was vocal in calling for heightened regulation industry-wide. On February 5, 2019, I was quoted in the New York Times, stating that QuadrigaCX “highlights the need for regulation” of digital currency trading platforms. While many will dispute that regulation stifles innovation, Bitbuy believes that a healthy equilibrium must exist to establish trust and protect end-users from bad actors.
While digital currency trading platforms purport to have 95% cold storage and promote their MSB license, it has become apparent to Bitbuy that these assertions are not enough on their own and greater self-regulation is required. We want to encourage trust to end-users in the trading platform they are using, and confidence with the digital currencies they maintain on trading platforms.
To address these issues head-on, Bitbuy has engaged Cipherblade, US-based blockchain forensics, investigative, and cybersecurity agency, to conduct a proof of reserves audit. Cipherblade’s recent site visit included a thorough review of our digital currency storage methodologies, an asset segregation test, and a team risk test. Cipherblade will publish a full report, and it will be made publically available to provide assurances to our end-users. It will also promote Bitbuy as a safe platform for Canadians seeking to participate in the purchase and sale of digital currencies.
These efforts could not have come at a better time. On March 14, 2019, the Canadian Securities Administrator (“CSA”) and the Investment Industry Regulatory Organization of Canada (“IIROC”) proposed a regulatory framework for digital currency trading platforms. The proposed regulatory framework looks to build consumer protection in the industry and to allow Canadian securities regulators to assert jurisdiction over existing trading platforms for digital currencies.
We believe that regulation is a necessary component for the long-term stability and growth of our industry and we look forward to being active participants in this initiative and responding in detail to the questions put forth by the CSA and IIROC.
As the industry landscape continues to evolve, Bitbuy is committed to seeking out new ways to continuously improve. Bitbuy conducts regular internal reviews to determine if there are any additional tools or tactics we can integrate. We have also committed to performing the proof of solvency audit with Cipherblade quarterly and will continue to publicize their reports. Bitbuy strives to provide a safe environment for purchasing bitcoin and other digital currencies in Canada and believe our efforts will serve as best practice guidance within the industry.
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