In May, Robinhood Markets, Inc. announced its acquisition of Toronto-based WonderFi for $250 million. This deal has sparked discussions about its implications for Canada’s digital asset ecosystem. WonderFi, which owns Coinsquare and Bitbuy, managed $2.1 billion in custody and served 1.6 million Canadian users. The company provided essential services for trading, wallets, and compliance in the digital asset space.

With this acquisition, Robinhood gains significant insight into the financial activities of Canadian households, entrepreneurs, and institutions. It now operates one of the largest trading engines and compliance frameworks for Canadians to buy, sell, and store digital assets. However, the sale has raised concerns as it effectively transferred control of a major part of Canada’s digital wealth to an American company.

The transaction occurred without a formal national security review or any public discussions about its strategic implications. By the end of the quarter, Robinhood, a U.S. company subject to the CLOUD Act, had acquired both legal and technical authority over a substantial portion of Canada’s digital assets. This situation has been described as a surrender of sovereignty, particularly as U.S. policies are making stablecoins a rapidly growing component of global digital wealth.

The concept of an “algorithmic empire” has emerged, highlighting how geopolitical power can be exerted through ownership of infrastructure rather than through territorial control. In the past, sovereignty over money was tied to physical institutions like the Royal Canadian Mint and the Bank of Canada. Today, however, money is increasingly represented by code, with transactions validated by algorithms and processed on cloud servers.

When Canadians use mobile wallets for everyday purchases, they may believe these transactions are domestic. In reality, these transactions often pass through servers located in the U.S., validated by software developed in California, and settled under Delaware corporate law. WonderFi was intended to be Canada’s response to foreign crypto platforms, built on three main pillars: secure crypto custody under Canadian jurisdiction, compliance with Canadian regulations, and insights into Canadian transaction behaviors.

The third pillar, behavioral intelligence, is particularly significant. Understanding the flow of money can provide insights into market trends and political dynamics. With Robinhood’s acquisition, this intelligence has shifted to the U.S., where it can be combined with American datasets, offering a comprehensive view of Canada’s financial landscape.

The acquisition also underscores the challenges posed by the algorithmic empire. Canadian governments cannot mandate that companies store data on Canadian soil or disclose proprietary source code due to the Canada-United States-Mexico Agreement (CUSMA). As a result, Canada has become increasingly reliant on foreign-owned cloud and payment infrastructures. Canadian startups often seek funding from U.S. sources rather than looking to build a robust domestic market. Consequently, algorithms developed abroad are now shaping Canadian financial risk and value.