Coinsquare and WonderFi Merger Would Create Canada’s Largest Crypto Exchange

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Two top crypto exchanges in Canada are reportedly looking for a merger. Bloomberg reported citing sources with knowledge of the matter who pushed forward merger talks between Coinsquare Ltd. and WonderFi Technologies. After the process, the entity would become the largest crypto exchange company in the region. However, there is no official announcement and should arrive in the next few days.

Shares of WonderFi were trading on the Toronto Stock Exchange when news of the publication surfaced on Thursday. The closing price of WonderFi stock was 31 cents with a drop of around 29% according to the information.

Following the stock halt, the company said while admitting further discussions with pending companies while pursuing potential acquisitions and upcoming deals.

Although the terms of the merger are not yet clear, the agreement is likely to show several potential scenarios. One is where Coinsquare shareholders will have majority and control over more board seats than WonderFi, in said Canada’s largest crypto exchange.

Previously, Coinsquare was reportedly in contact with Coinsmart Financial Inc., with the latter confirming that the former had previously walked away from the decision of the agreement to acquire the company.

Coinsmart said on Monday that the company’s management and board are monitoring the validity and effectiveness of crypto exchange companies reversing the decision and ending the potential merger.

Assuming the deal is finalized, the combined user base of the two exchange companies will be around 1.5 million people.

In November, WonderFi revealed that the company had a user base of around 650,000 on its platform while it held revenues worth $45 million with its subsidiaries. It holds approximately $258 million in assets under management (AUM). On the other hand, although there is no data available regarding Coinsquare’s AUM or revenue, its user base is said to number around 500,000 users.

Shares of WonderFi, which lists Kevin O’Leary, founder of O’Leary Financial Group and popular Shark Tank personality, as a strategic investor, have fallen about 63% since the company went public in June, although the price of the merger was not immediately revealed.

A $56 million investment for a 19.9% ​​stake in Coinsquare was made by

Vancouver-based Mogo Inc. in February 2021. At the time, WonderFi had a market capitalization of around $51 million, while Coinsquare claimed a pre-money valuation of between $250-350 million.

Andrew is a blockchain developer who developed his interest in cryptocurrencies during his post-grad studies. He is a fine observer of details and shares his passion for writing while being a developer. His backend blockchain knowledge helps him bring a unique perspective to his writing

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