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Calgary’s Winter of Crypto-Despair

Alberta opened a ‘regulatory sandbox’ for cryptocurrency companies. Its star example has collapsed into bankruptcy.

David Climenhaga 15 Nov 2022TheTyee.ca

David J. Climenhaga is an award-winning journalist, author, post-secondary teacher, poet and trade union communicator. He blogs at Visit AlbertaPolitics.ca. Follow him on Twitter at  @djclimenhaga.

It’s always the best of times in Alberta; it’s always the worst of times.

Readers may recall how Jason Kenney’s Best Summer Ever™ was followed by the worst winter ever. But that was just COVID, and never mind the wastewater viral load and all the kids home from school with a mysterious cough, COVID-19 is just so 2020.

As if in compensation, February 2022 brought us the spring of crypto-hope.

Who can forget the United Conservative Party government’s throne speech that month? “New legislation will solidify Alberta’s position as a modern electricity powerhouse and a magnet for investment in emerging technology like data storage and cryptocurrency,” it promised.

In March, Minister of Jobs, Economy and Northern Development Doug Schweitzer bragged that companies operating in the “crypto space” had shown “immense interest” in the government’s big ideas.

In April, the Financial Innovation Act received royal assent. The act, the government boasted, created a “regulatory sandbox” for crypto bros — that is, “a ‘safe space’ in which companies can test innovative products or services, without immediately meeting all regulatory requirements.”

“Alberta’s regulatory sandbox signals that Alberta is willing to work with and support innovators with cutting-edge products, like blockchain technologies and cryptocurrencies,” the government’s description went on.

And in June, Premier Kenney tweeted enthusiastically about a Calgary-based crypto company launch.

Woo-hoo!

Never mind that most of us had never heard of the company, called FTX Cryptocurrency Exchange, but Kenney provided a link to a Globe and Mail Report on Business story to illuminate us.

“Bahamas-based FTX Exchange, one of the world’s largest cryptocurrency companies, plans to officially launch its business in Canada by acquiring Bitvo Inc., a Calgary-based cryptoexchange that is regulated by all 13 provincial and territorial securities commissions across the country,” the story began in typical Report on Business gee-whiz style. (Having spent several years writing gee-whiz business stories for the Globe’s Report on Business, I know what I’m talking about.)

Cue the doom soundtrack.

Well, OK, the Globe’s reporter admitted, “the move comes amid severe industry volatility,” but whatever.

Sam Bankman-Fried, FTX’s youthful mop-topped CEO, sure wasn’t worried.

“Markets are going to do what markets are always going to do,” he reassured. “We’ve had some fantastic conversations with the Government of Alberta, which has been really constructive and is trying to take the lead in Canada and around the world for crypto policy and frameworks.”

Today, of course, Schweitzer is no longer a member of the government or even the legislature. Indeed, his Calgary-Elbow riding goes unrepresented in the legislature.

Kenney, too, is gone from the premier’s office, although still nominally an MLA. He has grown a beard, though, and appears to be taking to the lecture circuit, the latter-day equivalent of wandering in the wilderness.

The same Sam Bankman-Fried has been in the news again recently, too.

Three days ago, on Remembrance Day, the leading cryptocurrency company that brought such hope to Kenney, collapsed into bankruptcy, dragging the price of bitcoin and other cryptocurrencies with it further into the toilet.

The “King of Crypto” resigned, presumably with most of his crypto-billions transferred into something more secure, like municipal bonds or Krugerrands.

“Approximately 130 additional affiliated companies have commenced voluntary proceedings under Chapter 11 of the United States Bankruptcy Code,” FTX said in a news release.

So I guess that big crypto-boom we were promised in Calgary is off now, eh?

Danielle Smith, who would eventually become premier of Alberta when UCP members gave Kenney the bum’s rush for not being extreme enough, warned us last summer that we should all be thinking of getting into crypto to escape the plot by the Trudeau government, the World Bank and the World Economic Forum, the dreaded WEF, to force us to use an international digital currency.

Whatever are we to do about that now that the spring of crypto has given way to winter in Wild Rose Country?

Premier Smith?  [Tyee]

Read more: Local Economy, Politics

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