In 2021, Canada was a leader by launching the world’s first cryptocurrency ETFs, including Evolve’s spot Bitcoin ETF (TSX: EBIT), Ethereum ETF (TSX: ETHR) and Canada’s first multi-cryptocurrency ETF (TSX: ETC).
The historic collapse of FTX has put focus on the crypto industry and how this incident will impact the digital space. The Evolve Funds have no direct exposure to the FTX bankruptcy events.
Gemini Trust Company, LLC (Gemini) is the Sub-Custodian in respect of the holdings in EBIT and ETHR (together, the “Evolve Funds”). Gemini is a trust company licensed and regulated by the New York State Department of Financial Services (NYDFS) and is a full reserve platform. The Evolve Funds use segregated cold storage addresses which are separate from the addresses that Gemini uses for its other retail customers. Each Evolve Fund has its own separate and unique address on their respective blockchain. In addition, 100% of the Evolve Funds’ crypto assets are held in cold storage, never in a hot wallet and never rehypothecated. Gemini has been in the news recently since withdrawals were paused from the Gemini Earn program, after Gemini’s lending partner Genesis halted redemptions. Gemini Earn is a white labeled Genesis product and has no direct impact on Gemini’s institutional custody business, and by extension the Evolve Funds. Evolve ETFs regularly validates the unique amount of Bitcoin and Ethereum in each unique cold wallet addresses on the blockchain and the same activity is conducted by the Evolve Funds’ auditors Ernst & Young (EY) as part of the annual auditing process.
The index provider for the Evolve Funds is CF Benchmarks Ltd. The index calculation is to the highest regulatory standards and is regulated by the UK FCA under EU Benchmark Regulation. FTX as an exchange has never been included in the reference rate of our funds because despite their high profile and volumes, FTX did not meet CF Benchmarks’ published Constituent Exchange Criteria.
Operational due diligence continues to be the highest priority and at the core of the Evolve Funds. These events further highlight the benefit of using regulated products like EBIT and ETHR to access cryptocurrency opportunities.