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.
On Monday, April 3, three Canadian cryptocurrency exchanges, WonderFi (WNDR), Coinsquare, and CoinSmart, announced their plan to merge, thus creating the largest regulated cryptocurrency trading platform in the country.
Executives from the respective exchanges said the merger would help them function effectively while giving them a new edge in business growth. These three firms have a combined total of 1.65 million users and will have more than $600 million in assets under custody.
The news comes at a time when cryptocurrency exchanges have faced increasing regulatory scrutiny after the fallout from cryptocurrency exchange FTX in November 2022. Dean Skurka, WonderFi’s interim president and CEO, said that in Amid the heightened regulatory environment, the merger will offer a “path to profitability.” In a television interview with Bloomberg, he further added:
“As regulatory costs rise, I think it naturally leads to consolidation and acquisition opportunities like the ones we’ve seen today. Certainly with a combined company now, we believe that scale will address many of those concerns and there will be a clear path to profitability.”
As part of the merger, WondeFi will issue around 269,727,080 common shares to Coinsquare shareholders and 119,181,733 common shares to CoinSmart shareholders. Of the combined entity, WonderFi shareholders will own 38 percent of the company. Similarly, Coinsquare shareholders will own 43 percent of the combined entity, while CoinSmart shareholders will own 19 percent.
Popular SharkTank investor Kevin O’Leary is also a strategic investor in WonderFi. He said that this merger of three Canadian crypto exchanges sets a model for the world in terms of crypto regulations. O’Leary added: “If you can’t play the regulator, you won’t exist. Canada will be the shining example of what it will be like in every geography.”
Growing Crypto Regulations in Canada
Like US regulators, Canadian regulators have also been tightening their grip on the cryptocurrency sector. In October 2022, Coinsquare became the first Canadian crypto platform to register with the Investment Industry Regulatory Organization (IIROC).
Therefore, the regulated crypto trading business of the merged entity will be “consolidated under the registration of Coinsquare Investment Dealer” and new SRO member Coinsquare Capital Markets Ltd. “Regulation now comes first and is a competitive advantage “. saying Coinsquare CEO Martin Piszel.
Justin Hartzman, CoinSmart’s co-founder and chief executive, said the company’s merger would provide his clients with a “safe and regulated environment” for their money. He also added that the regulation-first approach to the crypto trading platform will bring peace of mind to clients.
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Bhushan is a FinTech enthusiast and has a good knack for understanding financial markets. His interest in economics and finance draws his attention to the new emerging markets of Blockchain technology and cryptocurrencies. He is continuously in a learning process and stays motivated by sharing the knowledge he has acquired. In his spare time, he reads thrillers and sometimes explores his culinary skills.
