​Canadian crypto exchanges WonderFi, Coinsquare, and CoinSmart announce a merger

What’s new? Canadian crypto exchanges WonderFi, Coinsquare, and CoinSmart have announced a merger to create the country’s largest regulated digital asset trading platform. The combined company will offer locals a wide range of products and services, including retail and institutional cryptocurrency trading, staking, and business-to-business (B2B) crypto payment processing. Combined, the companies have conducted more than $17 billion in transactions since 2017, with more than $600 million in assets in custody and a registered user base of 1,65 million Canadians after the merger, according to the press release.

WonderFi’s press release

How will the merger take place? The platform plans to expand its product offerings as part of a single ecosystem to attract new customers. The companies expect it to become a local market leader because of its scale and a broad range of services. Once the merger is complete, the platform is expected to have about $50 million in cash and investments and no debt.

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The new platform will be fully owned by several crypto companies, including Bitbuy, Coinberry, Coinsquare, CoinSmart, SmartPay, CBIX, Bitcoin.ca, and the soon-to-be-launched BetLegend.

As part of the transaction, WonderFi will issue 269 727 080 common shares to Coinsquare’s shareholders and 119 181 733 common shares to CoinSmart’s shareholders. Upon completion of the transaction, WonderFi shareholders will own approximately 38% of the Combined Company, Coinsquare will own 43% and CoinSmart will own 19%, on a partially diluted basis.

CoinSmart was bought by Coinsquare in September 2022 for an undisclosed amount. Last October, Coinsquare became the first crypto exchange to receive dealer registration from the Investment Industry Regulatory Organization of Canada (IIROC). Thus, Coinsquare is required to report on its financial position and maintain sufficient capital to meet its obligations. In exchange, client accounts are protected by the Canadian Investment Protection Fund in the event of a company's insolvency.

In July 2022, WonderFi, whose investors include Canadian entrepreneur Kevin O’Leary, bought Coinberry for $30 million.

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