Two prominent crypto exchanges in Canada are reportedly looking for a merger. Bloomberg reported citing sources with knowledge into the matter that advanced talks of merger between Coinsquare Ltd. and WonderFi Technologies. Following the process, the entity would become the largest crypto exchange firm within the region. However, there is no official announcement and is likely to come by in upcoming days.
WonderFi shares traded on the Toronto Stock Exchange as the news of the release surfaced on Thursday. Closing price for WonderFi stock was at 31 cents with a drop of about 29% reportedly.
Following the shares halt, the company stated while admitting the other discussions with companies on hold while moving ahead with the potential acquisitions and deal ahead.
Although the terms of the merger are not clear yet, the deal is likely to show several potential scenarios. One is where Coinsquare shareholders will have the majority stake and control over more board seats than WonderFi, in the said biggest crypto exchange in Canada.
Earlier Coinsquare was reported to be in contact with Coinsmart Financial Inc. which the latter confirmed that the former had walked away from the decision of the company’s acquisition agreement before.
Coinsmart said on Monday that the management and board of directors of the company were keeping a check on validity and effectiveness of the crypto exchange firm’s backing out the decision and terminating the potential merger.
Assuming the deal gets finalized, the combined user base of both the exchange firms will be of approx 1.5 million people.
In November, WonderFi disclosed the company has a user base of about 650,000 over its platform while it holds 45 million USD worth revenue along with its subsidiaries. It holds about 258 million USD worth assets under management (AUM). On the other hand, although there is no data available regarding AUM or revenue of Coinsquare, its user base is said to have around 500,000 users.
Shares of WonderFi, which list Kevin O’Leary, founder of the O’Leary Financial Group and a popular Shark Tank personality, as a strategic investor, have fallen by around 63% since the firm went public in June, though 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 about $51 million, while Coinsquare claimed a pre-money valuation of between $250 million and $350 million.
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Source: https://www.thecoinrepublic.com/2023/01/14/coinsquare-and-wonderfi-merger-would-create-canadas-largest-crypto-exchange/