WonderFi (WNDR), Coinsquare and CoinSmart as a combined entity will have a total of 1.65 million users and more than $600 million in assets under custody.ย
On Monday, April 3, three Canadian crypto exchanges โ WonderFi (WNDR), Coinsquare and CoinSmart โ announced their plan for a merger thereby creating the countryโs largest regulated crypto trading platform.
Executives from the respective exchanges said that the merger would help them function effectively while giving a new edge in business growth. These three firms have a combined 1.65 million users and shall have more than $600 million in assets under custody.
The news comes at a time when crypto exchanges have been facing growing regulatory scrutiny after the fallout of crypto exchange FTXย in November 2022. Dean Skurka, president and interim CEO of WonderFi, said that amid the heightened regulatory environment, the merger will offer a โpath to profitabilityโ. In a television interview with Bloomberg, he further added:
โAs regulatory costs increase I think it naturally leads to consolidation and acquisition opportunities like weโve seen today. Certainly, with a combined company now we believe the scale will address a lot of those concerns, and there will be a clear path to profitability.โ
As part of the merger, WondeFi will issue about 269,727,080 common shares to Coinsquareโs shareholders and 119,181,733 common shares to CoinSmartโs shareholders. Of the combined entity, WonderFi shareholders will own 38 percent of the company. Similarly, the Coinsquare shareholders will own 43 percent of the combined entity while CoinSmart shareholders will own 19 percent.
Popular SharkTank investor Kevin OโLeary is also a strategic investor in WonderFi. He said that this merger of three Canadian crypto exchanges sets up a model for the world in terms of crypto regulations. OโLeary added: โIf you canโt play ball with the regulator, you will not exist. Canada will be the shining example of how itโs going to go in every single geography.โ
Growing Crypto Regulations in Canada
Just like the US regulators, the Canadian regulators have also been tightening their grip on the crypto sector. In October 2022, Coinsquare became the first Canadian crypto platform to register with the Investment Industry Regulatory Organization (IIROC).
Thus, the regulated crypto trading business of the merged entity will be โconsolidated under Coinsquareโs investment dealer registrantโ and new SRO member, Coinsquare Capital Markets Ltd. โRegulation is now coming first and itโs a competitive advantage,โ said Coinsquare CEO Martin Piszel.
Justin Hartzman, co-founder and CEO of CoinSmart, said that merging the company would give its customers a โregulated, safe environmentโ for their money. He also added that the regulation-first approach to the crypto trading platform will give customers reassurance.
Bhushan is a FinTech enthusiast and holds a good flair in understanding financial markets. His interest in economics and finance draw his attention towards the new emerging Blockchain Technology and Cryptocurrency markets. He is continuously in a learning process and keeps himself motivated by sharing his acquired knowledge. In free time he reads thriller fictions novels and sometimes explore his culinary skills.
