Toronto-born Coinsquare, embroiled in a dispute with rival CoinSmart, is reportedly in “advanced merger talks” with Vancouver-based WonderFi Technologies.
Combined, Coinsquare and WonderFi would form Canada’s largest cryptocurrency exchange.
Exact terms remain unclear and “there is no certainty that a deal will be consummated between the two companies,” sources familiar with the matter informed Bloomberg. But if a deal does close, it could happen within days, the report suggests.
A combined exchange would have a user base of more than 1.1 million.
Shares of WonderFi, backed by investor Kevin O’Leary, have fallen more than 60% since the company went public over the summer. The downtrend mirrors a broader crypto bear market exasperated by recent scandals, though some Canadian firms such as Coinsquare have attempted to remain onside with regulators, even as the Canadian Securities Administration warns against crypto investing.
One source “with direct knowledge of the discussions with WonderFi” told Bloomberg that Coinsquare’s regulatory status with the Investment Industry Regulatory Organization of Canada could “help it take a leading role in consolidating other distressed cryptocurrency operators in Canada.”
“The smaller exchanges will find themselves forced into consolidation … or face extinction,” the source predicted.
WonderFi has historically been on the buying side of such transactions.
In September the BC tech firm acquired Toronto’s Blockchain Foundry, which launched crypto-based learn-to-earn platform Metacademy. Last July, WonderFi spent $38 million on Coinberry, also from Toronto.
The Vancouver fintech, founded in 2021, has certainly lived up to the hype as a BC crypto startup-to-watch.
Coinsquare was founded in Toronto in 2014.