WonderFi and the Surrender of Financial Sovereignty

Why Canada must block the Robinhood takeover of its digital rails.

WonderFi and the Surrender of Financial Sovereignty

Why Canada must block the Robinhood takeover of its digital rails
Appleton’s Clause & Effect | Special Edition - 24 July 2025
⏱ ~8 min read

Selling the Hudson’s Bay Company triggered an existential national outcry. Yet today, the quiet handover of WonderFi—our only large-scale crypto exchange—to a U.S. platform elicits only silence. Why?

1. The Quiet Surrender of Financial Sovereignty

While we debate grocery prices and housing costs, Canada is preparing to surrender control of its last major digital asset platform with barely a whisper of protest. The proposed $250 million acquisition of WonderFi by Robinhood—a deal that would transfer control of over $2.1 billion in Canadian digital assets and platforms, including Bitbuy, Coinsquare, and Coinberry—represents the final capitulation of our digital financial sovereignty.¹

This is not a marginal fintech transaction. WonderFi controls the lion's share of Canada's regulated cryptocurrency infrastructure, serving over 1.6 million users.² Once Robinhood owns it, Canada will have no independent, domestically controlled crypto exchange of meaningful scale. We will have become digital sharecroppers in our own economy.

Consider the symmetry: the same week the White House proclaimed its intention to achieve "unquestioned technological dominance," President Trump explicitly stated his desire for U.S. companies to purchase Canadian banks.³ The WonderFi acquisition cannot be viewed outside this context of American financial expansionism.

1. The Infrastructure Trap: Why Digital Platforms Are the New Battlegrounds

Crypto exchanges are not merely trading platforms; they are gateways to the next phase of financial architecture. They enable stablecoin transactions, tokenized asset trading, and will eventually support central bank digital currencies. Control of these platforms is control of the future payments system.

The strategic importance is why the U.S. blocked Ant Financial’s $1.2 billion acquisition of MoneyGram in 2018, recognizing that Chinese control over 650 million global transactions would compromise American financial surveillance capabilities.⁴ This is why the EU has established "gatekeeper obligations" for major platforms and blocked multiple digital market consolidations.⁵ It's why China maintains comprehensive data localization requirements and restricts foreign access to its digital payment systems.⁶

And we also need to consider the impact of the U.S. CLOUD Act. This legislation establishes that data accessibility follows corporate control, not physical location.⁷ Any data controlled by a U.S. company is subject to American legal jurisdiction, regardless of where it is stored or processed.

The implications for the WonderFi acquisition are profound. Once Robinhood controls the platform, all Canadian user data, transaction records, and operational systems become subject to U.S. legal process. American authorities could subpoena Canadian financial information without Canadian judicial review. Canadian users' privacy protections would be subordinated to American surveillance priorities.

The European Court of Justice has twice invalidated data-sharing agreements with the United States precisely because of these extraterritorial claims.⁸ The EU's Schrems II decision established that governments can legitimately suspend data transfers when adequate protection cannot be ensured. Why is Canada not asserting similar sovereignty protections?

In her compelling recent Globe and Mail column, Vass Bednar asked, “If we wouldn’t let Americans buy our biggest bank, why let them buy our biggest crypto firm?” It is the right question. And the only answer that protects our future is no. ⁹

Every major power understands that digital financial infrastructure is a critical form of national infrastructure, except, apparently, Canada.

1. The Robinhood Problem

Let us dispense with any fiction that Robinhood represents responsible financial stewardship. The company's regulatory record reads like a case study in corporate malfeasance:

• $45 million in SEC penalties in January 2025 alone for violations spanning over 10 separate securities law provisions.

• $29.75 million in FINRA penalties for systematic failures, including Electronic Blue Sheets inaccuracies covering 392 million transactions.

• Cybersecurity vulnerabilities affecting over 7 million customers.

• Payment for order flow controversies that prioritize revenue over investor protection. ¹⁰

This is the company we are entrusting with Canada's digital financial future. This is the platform that will control the data flows of 1.6 million Canadian users and process billions in digital asset transactions.

But Robinhood's regulatory problems are merely symptoms of a deeper issue: its business model is fundamentally incompatible with the cautious, investor-protection-focused approach that defines Canadian financial regulation. The Canadian Investment Regulatory Organization (CIRO) has spent years building a careful, rules-based digital asset framework. Robinhood's aggressive, gamified approach represents the antithesis of these principles.¹¹ Its “gamified” model clashes with CIRO’s prudential ethos and would import U.S. payment-for-order-flow controversies into Canada. WonderFi's governance failures, including dramatic leadership turnover and internal conflicts, complicate any policy defense of the company.

However, Canada's national interest requires looking beyond cryptocurrency's negative associations to recognize WonderFi as a critical form of financial infrastructure.

The alternative to domestic control is not some pristine market outcome: it is subordination to American financial architecture designed to serve American interests. The choice is between imperfect Canadian control and efficient American extraction.

This reflects a broader institutional failure. Canada has spent decades building world-class platforms—Nortel, BlackBerry, the early Internet innovations that created today's digital economy—only to surrender them precisely when they become strategically indispensable.

Canada excels at invention, and then we fail at retention. This pattern must end.

2. The Stablecoin Gambit: Currency War by Other Means

Trump's signing of the GENIUS Act in July 2025 established legislation that hardwires the U.S. dollar into stablecoin infrastructure. This represents a masterpiece of monetary imperialism.¹² By requiring stablecoins to be fully backed by U.S. Treasury securities, the legislation transforms private cryptocurrency companies into significant purchasers of American government debt, thereby extending dollar dominance into digital commerce.

Standard Chartered estimates stablecoin supply could reach $2 trillion by 2028, requiring $1.6 trillion in additional Treasury purchases.¹³ This would make stablecoin issuers among the largest holders of U.S. government debt—a financial architecture that embeds American monetary authority into the global digital economy.

Robinhood is already developing U.S. dollar stablecoin products.¹⁴ Suppose those tokens are traded on Canadian exchanges under its control. In that case, the Bank of Canada risks watching a private digital USD colonize domestic payments before an e-CAD prototype leaves the lab. We risk what analysts call "digital dollarization", the substitution of Canadian-regulated digital payments with U.S.-denominated, U.S.-controlled alternatives that bypass Bank of Canada oversight.

This is not theoretical financial evolution. It is deliberate policy architecture designed to extend American monetary hegemony. And Canada is about to provide the infrastructure.

3. The Legal Arsenal We Ignore

Canada has established financial institutions that reflect its values during times of crisis: central banks during the Depression, public broadcasters during wartime, and national energy policies during resource shocks. Today's digital transformation demands similar institutional thinking.

Canada possesses the legal authority to block this acquisition.

The Investment Canada Act

The Investment Canada Act (ICA) provides the Minister of Industry with sweeping authority to review any foreign acquisition, such as Robinhood’s proposed purchase of WonderFi, for potential risks to Canada’s economy and national security. The ICA empowers the federal government to review and reject foreign acquisitions that fail to provide a "net benefit to Canada" or pose a national security threat.¹⁵ The ICA's national security provisions apply to investments in businesses that could be "injurious to national security," including those involving "critical infrastructure" and "sensitive personal information."¹⁶ The ICA's scope explicitly includes fintech and digital asset platforms as ‘critical infrastructure’, justifying intervention on sovereignty grounds. The recent 2024 amendments explicitly flagged financial-tech infrastructure as sensitive.¹⁷

This means Ottawa can block or impose conditions on the transaction if it poses risks to sensitive digital infrastructure or the integrity of Canadian personal data. A cryptocurrency platform controlling $2.1 billion in Canadian assets and serving 1.6 million users seems to meet these thresholds.

International precedents support intervention. The U.S. uses CFIUS to block foreign acquisitions of financial technology companies. The EU applies its Foreign Direct Investment Screening Regulation to protect critical infrastructure. China restricts foreign access to its digital payment systems. The U.S. (CFIUS), the EU, and China routinely use similar powers. So should we.

The federal government should immediately invoke the Investment Canada Act to review this transaction under both net benefit and national security provisions. The standard has been met. The authority exists. Only political will is lacking.

Competition Law

In addition, there is scope for the Competition Bureau to act, but it appears ensconced in 20th-century dreamscapes and thus asleep at the switch.

Canada’s Competition Act empowers the Commissioner of Competition to challenge mergers that are likely to substantially prevent or lessen competition in a market. The Commissioner can seek orders from the Competition Tribunal to prohibit a proposed transaction, such as the WonderFi-Robinhood deal, or require divestitures and behavioural remedies, even up to one year after closing. Given the scale and significance of WonderFi, the Commissioner could credibly argue that its acquisition might stifle competition in the Canadian digital asset market, justifying preventative action under the Act.

The Competition Bureau's July 2025 “no-action letter” represents regulatory malpractice in an era of great power competition.¹⁸ When the United States proclaims its intention to achieve "unquestioned technological dominance" and explicitly targets our banking sector, Canadian regulators issue no-action letters for infrastructure consolidation. This is not technocratic competence. This is strategic confusion in a moment that demands clarity.

Ministry of Finance

The Minister of Finance, supported by agencies such as the Office of the Superintendent of Financial Institutions (OSFI), has the power to approve or block strategic transactions in the financial sector if they could undermine regulatory compliance or the soundness of Canada’s financial system. This includes OFSI’s authority over the corporate structure and leadership of institutions and, where warranted, measures to freeze assets or require divestiture in the national interest.

CIRO, as the national self-regulatory organization overseeing crypto platforms, has the authority to withhold or attach conditions to the registration of a platform undergoing a change of ownership or control. If Robinhood’s business conduct, governance practices, or financial controls are deemed incompatible with CIRO’s standards for investor protection and market integrity, regulators can suspend, restrict, or decline to renew licensing for WonderFi platforms. Precedent suggests that CIRO and the Canadian Securities Administrators can require new owners to meet enhanced prudential and operational standards or delay closing until compliance is demonstrated.

AI Minister’s First Chance to Lean In

With the creation of Canada’s new Minister of Artificial Intelligence and Digital Innovation, the federal government recognizes the strategic importance of digital and AI infrastructure to national security and economic resilience. While the AI Minister does not hold formal blocking powers under the ICA, Competition Act, or financial sector laws, the Minister’s expert assessment and Cabinet-level input are likely to influence how transactions like the WonderFi acquisition are reviewed—especially where risks to AI, digital sovereignty, and critical market infrastructure are at issue. The WonderFi sale thus provides an early litmus test for the AI Minister’s advisory role in safeguarding Canadian digital assets as matters of policy and national interest.

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An initial Five-Point Checklist

1. Invoke a Full National-Security Review under the Act, not a perfunctory competition screen.

2. Mandate Canadian Data Residency & Judicial Oversight as a non-negotiable condition.

3. Cap Order-Flow Revenues to align with CIRO investor-protection norms and get OFSI to review these transactions.

4. Require Source-Code Escrow for trading and custody algorithms. Canada’s new AI Minister needs to be involved now.

5. Impose a “Digital-Dollarization” Firewall: no USD-linked stablecoin launches without explicit Bank of Canada approval.

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Canada needs to adapt its strategic regulatory approach to a changing world. We cannot afford to be the last nation to understand that digital infrastructure is national infrastructure.

History does not wait for those who sleep through sovereignty. The time to act is now.

Copyright 2025, Barry Appleton. All rights reserved.

1. WonderFi Technologies Inc., "WonderFi Enters into Definitive Agreement To Be Acquired by Robinhood Markets," July 15, 2025, https://www.wonder.fi/press-release/wonderfi-enters-into-definitive-agreement-to-be-acquired-by-robinhood-markets.

2. WonderFi Technologies Inc., "WonderFi Enters into Definitive Agreement To Be Acquired by Robinhood Markets," July 15, 2025,

3. The White House, America's AI Action Plan (Washington, DC: Executive Office of the President, July 2025), 2

4. TechCrunch, "The US Government blocks MoneyGram's $1.2B sale to Alibaba's Ant Financial," January 2, 2018, https://techcrunch.com/2018/01/02/moneygram-ant-financial-alibaba-deal-collapses/.

5. European Parliament, "EU Digital Markets Act and Digital Services Act explained," December 9, 2021, https://www.europarl.europa.eu/topics/en/article/20211209STO19124/eu-digital-markets-act-and-digital-services-act-explained.

6. InCountry, "China's digital data sovereignty laws and regulations," 2024, https://incountry.com/blog/chinas-digital-data-sovereignty-laws-and-regulations/.

7. CLOUD Act, H.R.4943 — Clarifying Lawful Overseas Use of Data Act, 115th Congress (2018).

8. Data Protection Commissioner v Facebook Ireland Ltd, Maximilian Schrems and intervening parties, Case C-311/15, October 6, 2015. (known as the Schrems I case). Data Protection Commissioner v Facebook Ireland Ltd, Maximilian Schrems and intervening parties, Case C-311/18, June 16, 2020, (known as the Schrems II case). TrustArc, "How the Schrems II Decision Changed Privacy Law," 2020, https://trustarc.com/resource/schrems-ii-decision-changed-privacy-law/

9. Vass Bednar: “We won’t let Americans buy our biggest bank. Why let them buy our biggest crypto firm? Globe & Mail, July 23, 2025.

10. U.S. Securities and Exchange Commission, "Two Robinhood Broker-Dealers to Pay $45 Million in Combined Penalties for Violating More Than 10 Separate Securities Law Provisions," Press Release 2025-5, January 15, 2025, https://www.sec.gov/newsroom/press-releases/2025-5.

11. SiliconANGLE, "Robinhood to acquire Canadian crypto exchange WonderFi for $179M," May 13, 2025, https://siliconangle.com/2025/05/13/robinhood-acquire-canadian-crypto-exchange-wonderfi-179m/.

12. Digital Chamber, "The Stablecoin Pivot & U.S. Dollar Dominance in the Digital Era," 2025, https://digitalchamber.org/the-stablecoin-pivot-u-s-dollar-dominance-in-the-digital-era/.

13. Digital Chamber, "The Stablecoin Pivot & U.S. Dollar Dominance in the Digital Era." The U.S. Treasury Department itself has cited the Standard Chartered study in official presentations, lending credibility to the $2 trillion projection.

14. The White House, "Strengthening American Leadership in Digital Financial Technology," January 20, 2025

15. Innovation, Science and Economic Development Canada, "Investment Canada Act," https://ised-isde.canada.ca/site/investment-canada-act/en.

16. Innovation, Science and Economic Development Canada, "What is the Investment Canada Act?" https://ised-isde.canada.ca/site/investment-canada-act/en/what-investment-canada-act.

17. Baker McKenzie, "Canada introduces legislation to strengthen the National Security Provisions of the Investment Canada Act," December 21, 2022, https://foreigninvestment.bakermckenzie.com/2022/12/21/canada-introduces-legislation-to-strengthen-the-national-security-provisions-of-the-investment-canada-act/.

18. The Competition Bureau Canada has not published specific details regarding the WonderFi review; however, WonderFi issued a press release confirming that a no-action determination was issued on July 17, 2025. WonderFi press release, July 21, 2025 “Supreme Court of British Columbia Grants Final Order to WonderFi Approving Acquisition by Robinhood” stat: “The Company also advises that on July 17, 2025, Robinhood received a no-action letter from the Canadian Competition Bureau confirming that the Commissioner of Competition does not intend to make an application under section 92 of the Competition Act (Canada) in respect of the Arrangement.” - https://www.wonder.fi/press-release/supreme-court-of-british-columbia-grants-final-order-to-wonderfi-approving-acquisition-by-robinhood.