Following ample speculation, Vancouver’s WonderFi formally announced an intention to acquire rivals Coinsquare and CoinSmart in April.
Coinsquare had previously announced plans to acquire CoinSmart for $29 million in cash and shares in 2022, but backed out in January prompting CoinSmart to commence legal proceedings.
From the sidelines, WonderFi spotted an opportunity to bring three crypto-asset trading platforms together.
WonderFi Technologies, Coinsquare, and CoinSmart this week announced the closing of their business combination transaction, creating one of the largest regulated crypto investing ecosystems in Canada.
“WonderFi is emerging from this transformational transaction with a strong balance sheet that will enable us to execute on our core strategy,” stated WonderFi President Dean Skurka.
“In the evolving digital asset industry, WonderFi is exceptionally positioned as the owner of some of the most respected and regulated crypto trading platforms globally,” he added.
The combined platform boasts over 1.6 million registered users and assets under custody valued at $600 million.
With a “firmly established position,” Skurka is excited for WonderFi’s “next chapter as we integrate our million registered users, cross-sell services across our diversified suite of products, and add to our portfolio of innovative products.”
Kevin O’Leary, an investor in WonderFi, agrees.
“In the rapidly evolving digital asset sector, WonderFi holds an exceptional position as one of the most regulated crypto trading ecosystems globally,” O’Leary said, which he considers a “major advantage as unregistered international exchanges can no longer serve the Canadian market without adhering to local regulations.”
In the past, says O’Leary, “operating a registered cryptocurrency platform posed a disadvantage compared to competitors who could offer services without the burden of compliance costs.” However, “those days are now behind us,” the investor believes.
“Now more than ever, investors are actively seeking trading platforms that operate in harmony with regulators,” O’Leary posited. “Through consolidation, WonderFi has been one step ahead every step of the way.”
The transaction led to a reconfiguration of ownership stakes. WonderFi, Coinsquare, and CoinSmart shareholders own approximately 38%, 43%, and 19% of WonderFi, respectively.
Mogo Inc. emerged as the largest shareholder, holding about 14% of WonderFi’s common shares.