Canada’s crypto exchange landscape appears to be consolidating after Coinsquare, one of the country’s largest digital asset trading platforms, acquired CoinSmart for an undisclosed amount.
Thursday, Coinsquare announced that it had reached a definitive agreement to purchase all of the issued and outstanding shares of CoinSmart subsidiary Simply Digital. Once the deal is final, CoinSmart will hold approximately a 12% stake in Coinsquare on a pro forma basis.
Shares of cryptocurrency exchange CoinSmart, which is listed on the NEO exchange, jumped 67% on Friday, largely in response to the news.
The acquisition makes Coinsquare one of the largest cryptocurrency exchanges in Canada and expands its operational and business capabilities. Founded in 2014, Coinsquare has expanded its service offerings to include retail and institutional trading, crypto payment processing, and digital asset custody.
CoinSmart was co-founded in 2018 by Justin Hartzman, who also served as CEO of the company. Following the acquisition, Hartzman will join Coinsquare’s executive team.
As a publicly traded company, CoinSmart discloses its financial statements on a quarterly basis. In its annual summary published on April 1, the company reported $16.7 million in gross revenue in 2021, an increase of 357% year over year. Retail trading volume grew 875%, likely reflecting the Bitcoin bull market (BTC) of 2021.
Coinsquare is one of only two cryptocurrency exchanges operating in Canada that have pre-registered with their major regulators as they work to fully comply with securities laws. Pre-registration requirements were established by the Canadian Securities Administrators, or CSAs, and allow cryptocurrency exchanges to remain operational while their completed applications are reviewed with the CSA.
— CoinSmart (@CoinSmart) August 8, 2022
In an interview with Cointelegraph on the sidelines of the Futurist conference in Toronto in August, Coinsquare COO Eric Richmond explained that the cryptocurrency exchange registered at the Investment Industry Regulatory Organization of Canada, or IIROC, in November 2020.
Cryptocurrency adoption in Canada is on the rise, but like other countries, participation is largely based on underlying market conditions. According to a KPMG survey, adoption is also growing within institutional circles due to the perceived advantages and innovative potential of cryptocurrencies.
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