The merger between the three companies has resulted in the WonderFi entity, which has become one of the largest regulated crypto investing ecosystems in Canada. The company can offer Canadians various products and services such as retail and institutional crypto trading, staking products, and B2B crypto payment processing and digital asset custody staking products. According to the official press release, this service portfolio will also include sports betting and gaming in the future.
The combined company has transacted over CAD 17 billion since 2017 and has more than CAD 600 million in assets under custody, with a registered user base that exceeds 1.6 million Canadians. The largest shareholder of the combined company is Mogo, which owns around 14% at the time of writing.
It’s also worth noting that WonderFi now holds a 43% ownership stake in Tetra Trust Company, which is Canada's only trust company licenced to custody digital assets. Furthermore, WonderFi has launched a new crypto payment solution named SmartPay in a bid to tackle the currently troubled crypto payment landscape.
The transaction was completed pursuant to two separate court-approved plans of arrangement involving Coinsquare and CoinSmart, respectively. According to theglobeandmail.com, following the end of the transaction, existing WonderFi shareholders are expected to own 38% of the newly combined company. Former Coinsquare shareholders will own 43% while former CoinSmart shareholders will receive 19% on a partially diluted basis.
In September 2022, Coinsquare revealed its intention to purchase CoinSmart for around CAD 29 million in cash and shares. The deal was expected to close by the end of that year, but Coinsquare changed its mind and pulled out of the agreement citing unacceptable costs and risks associated with the public disclosure obligations required by regulators. In response, CoinSmart representatives revealed that they would attack Coinsquare’s decision in court and would ask for monetary damages.
WonderFi eventually stepped in and started to formulate its own deal without issuing an official comment at the time. However, it revealed this three-way merger at the beginning of April 2023. WonderFi representatives cited by theglobeandmail.com revealed that the company intends to wind down the CoinSmart platform, which launched in 2018. However, WonderFi’s plans for the CoinSmart closing are still pending regulatory and shareholder approvals.
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