WonderFi Technologies, a technology company providing access to decentralized finance (DeFi), is considering a merger deal with trading platform Coinsquare.
The goal would be to establish the largest cryptocurrency exchange in Canada.
A deal on the horizon
As reported by Bloomberg, the two sides are in advanced merger talks. However, WonderFi did not comment further, adding that discussions could not guarantee cooperation:
“These discussions are preliminary in nature and are ongoing, and no assurances can be given that any agreement or arrangements will be reached, or that terms of a transaction will be agreed to, or that a transaction will be completed.
The company does not intend to make further comments unless or until an agreement has been made and there is a transaction to be announced.”
Assuming the two organizations shake hands, they could create Canada’s largest cryptocurrency platform. The potential trading venue would have over 1.15 million customers as WonderFi has around 650,000 users and Coinsquare has 500,000.
The exact terms of the deal remain unclear. However, one scenario sees Coinsquare stakeholders gaining a majority stake in the combined organization and controlling more seats on the Board of Directors.
WonderFi — financially backed by popular TV personality Kevin O’Leary — saw its stock price soar shortly after the rumors surfaced. WNDR currently trades at around $0.23, up nearly 30% from yesterday’s figures.
Coinsquare was the first Canadian cryptocurrency company to become a member of the Investment Industry Regulatory Organization of Canada (IIROC) in October last year. The registration forced the company to segregate client assets via a licensed custodian and to keep more capital on hand. In addition, Canadian Investment Protection Funds guarantee cash held in clients’ trading accounts.
Coinsquare was close to acquisition its rival CoinSmart Financial recently and thus brought two of Canada’s crypto giants under one roof. The company eventually withdrew its intentions after factoring in the “unacceptable costs and risks” associated with the deal.
The WonderFi acquisitions
The O’Leary-backed entity ramped up its presence in April of last year purchase the Toronto-based cryptocurrency exchange – Bitbuy Technologies – for about $163 million.
WonderFi doubled a week later, purchase the Coinberry platform for about 30 million dollars. The latter had over 150 employees and 750,000 customers.
“We are definitely gearing up to go face-to-face on the global stage. But remember, we’re doing this on a regulated basis, unlike those other players. We operate 100% according to the order and are not taking any risk,” O’Leary said at the time.
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