We’ve Got Wallets (Crypto, Not Velcro!)

Big news: Wealthsimple has crypto wallets — specifically hosted wallets, not non-custodial wallets; we’ll explain more below — which is pretty neat if you care about blockchain and the future of money. Because now, not only can you buy and sell bitcoin and ether within the Wealthsimple Trade app, you can also transfer those coins into and out of your account. That means if you, say, bought ether on another, perhaps less-trusted marketplace before Wealthsimple became Canada’s first regulated crypto trading platform (not-so-humble brag), you can now move all your ETH into one handy place: a Wealthsimple crypto wallet. Or you can move your ether out of the app to spend elsewhere. In the meantime, we talked with Danish Ajmeri, Wealthsimple’s Head of Crypto, about why he’s jazzed about wallets, and why he suspects you will be too.

First, what exactly are crypto wallets?

Crypto wallets are software applications or hardware devices that store cryptocurrencies and other digital assets. They’re a critical aspect of blockchain.

Go on…

Well, 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, like big banks. And a crypto wallet gives you a lot more autonomy. Now that clients can transfer crypto and use wallet functionality, they can move their digital assets between various crypto apps and platforms, like Wealthsimple.

I liked my old Wealthsimple crypto account. Why is this better?

First, let me say that if you like your crypto the way it was before, you don’t have to change anything; you don’t have to use these new features. The problem for some users, though, was that any crypto they bought through Wealthsimple was essentially locked in their accounts. It was a closed-loop system: clients could trade all they wanted, but they couldn’t transfer crypto in or out of our ecosystem; the crypto they owned was basically stuck in a giant Wealthsimple wallet.

Some clients want greater control of their assets. Which we absolutely understand.

And this closed-loop system was bad?

Not at all. It worked fine for most people, and a lot of people will continue to use Wealthsimple the same way. But, as I said, some clients want greater control of their assets. Which we absolutely understand. Now that we’ve enabled wallet functionality, clients can purchase coins on other exchanges, for instance, and then transfer them to the Wealthsimple app for safekeeping. And once we enable withdrawals for coins other than bitcoin and ether — which we will soon — clients will be able to buy crypto through Wealthsimple and then move it elsewhere.

Wait, why would someone want to move crypto out of Wealthsimple?

The idea behind cryptocurrencies and blockchain is to have an open, transparent system, and there are currently all sorts of applications being developed on various platforms expanding on this idea — NFTs, blockchain games. The list goes on. The trouble with our old system was that clients couldn’t withdraw and use crypto bought through Wealthsimple to engage with any of these apps. Now that we’ve enabled withdrawals for bitcoin and ether, they’ll be able to. We suspect this level of freedom will be really attractive to clients as new crypto ecosystems emerge.

There are tons of cryptocurrencies. Can clients transfer any of them in and out of the Wealthsimple app?

Last fall, we enabled bitcoin and ether deposits. We’ve since expanded to allow withdrawals and deposits of BTC and ETH, as well as several other popular tokens: dogecoin (DOGE), litecoin (LTC), and bitcoin cash (BCH), with more coins coming soon. We know that’s something our users have asked for, so it was important for us to deliver.

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Can you give me an example of how or why I might transfer crypto today?

Sure. First, deposits: let’s say you made a beautiful drawing of your dog and turned it into an NFT. And let’s say the world loved your dog NFT, and you sold it for a lot of money. If you’re a Wealthsimple client, you can now sell your NFT on a marketplace, like OpenSea, then transfer the ether you made to our trusted platform, where you can either store it or sell it for dollars. Now a withdrawal example: if you want to play a crypto game, like Axie Infinity, you need to have a crypto wallet with ether to buy and use the Axie characters. Now that we’ve enabled ether withdrawals, you can buy coins from Wealthsimple and then move them to a personal wallet so you can play.

So I’ll need a personal wallet, too?

If you want to transfer coins out of Wealthsimple, yes. You’ll need what’s known as a self-custody wallet. Our wallets are hosted, or custodial, wallets, which basically means that we take extra steps to keep your crypto secure, like keeping most of it in offline cold storage, so you don’t have sole responsibility of protecting your assets. We’ve also got insurance. You won’t get that with self-custody.

Wealthsimple wallets are safer than other kinds of wallets, then?

We’re trying to be extra careful. When we built our crypto platform (the first regulated way to trade crypto in Canada), we worked closely with regulators to try to make sure it was as dependable as possible. We’ve been equally diligent in developing our transfer and wallet functionalities. I think Wealthsimple’s track record of building top-notch trading tools speaks to the level of care and attention that we put into these sorts of things.

This story was updated in February 2022 to include that Wealthsimple now allows for deposits of polygon, chainlink, and uniswap. Crypto trading involves risk. To get more information on our products, investment decisions, fee schedules, user testimonials, promotions & more visit wsim.co/disclaimers.

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Wealthsimple

Wealthsimple uses technology and smart, friendly humans to help you grow and manage your money. Invest, save, trade, and even do your taxes in a better, simpler way.