Canada’s crypto exchange appears to be consolidating after Coinsquare, one of the country’s largest digital asset trading platforms, acquired CoinSmart for an undisclosed sum.
On Thursday, Coinsquare announced that it has entered into a definitive agreement to purchase all of the issued and outstanding shares of Simply Digital’s wholly owned subsidiary CoinSmart. Once the deal becomes final, CoinSmart will hold a roughly 12% ownership stake in Coinsquare on a pro-forma basis.
Shares of crypto exchange CoinSmart, which trades on the NEO Exchange, surged 67% on Friday, largely in response to the news.
This acquisition makes Coinsquare one of the largest Canadian crypto exchanges and expands its operational and trading 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 the company’s CEO. Following the acquisition, Hartzman will join Coinsquare’s executive team.
As a publicly traded company, CoinSmart publishes its financial statements quarterly. In its annual summary released on April 1, the company reported gross revenue of $16.7 million in 2021, a year-over-year increase of 357%. Retail trade volume increased by 875%, likely due to Bitcoin (BTC) bull market of 2021.
Coinsquare is one of two crypto exchanges operating in Canada to pre-register with their major regulators as they work towards full compliance with securities laws. Pre-registration requirements have been set by the Canadian Securities Administrators, or CSA, and allow crypto exchanges to remain operational while their full applications with the CSA are being reviewed.
— CoinSmart (@CoinSmart) August 8, 2022
Speaking to Cointelegraph on the sidelines of the Futuristic Conference in Toronto in August, Coinsquare COO Eric Richmond explained that registered crypto exchange with the Investment Industry Regulatory Organization of Canada, or IIROC, in November 2020.
Cryptocurrency adoption is on the rise in Canada, but like other countries, participation is largely based on fundamental market conditions. According to a KPMG survey, adoption is too growing in institutional circles due to the perceived positive and innovative potential of cryptocurrencies.