WonderFi Acquires Canadian Exchange BitBuy, Aims to Become Largest BTC/CAD Market
A planned acquisition of the Canadian crypto exchange Bitbuy by the publicly-traded software company WonderFi was closed on Thursday, after the deal was delayed for months due to “major hurdles” by regulators.
Following the completion of the acquisition, the merged company will get “a leading market share” in the market for bitcoin (BTC) and ethereum (ETH) trading with Canadian dollars (CAD), an emailed announcement from the two companies said.
It added that the two companies have collectively raised over USD 100m during the past 12 months. The merged entity will now embark on what it called an “aggressive international expansion,” with the first countries targeted being Australia and the US.
Also, WonderFi said that this deal adds over 375,000 registered users to its ecosystem and over USD 455m assets under custody. Ir also expects “material revenue and cost synergies” via user base integration, cross-selling services and a combined global offering.
The company formally being acquired by WonderFi is First Ledger Corp (FLC), Bitbuy’s parent company.
“The consideration paid to former shareholders of FLC consisted of 70 million newly issued common shares of WonderFi, most of which were subject to certain lock-up requirements, USD 20m in upfront cash and USD 30m in deferred cash via a vendor-takeback note due in 12 months, which is subject to a working capital adjustment,” per the announcement.
The agreement to acquire Bitbuy was first announced in early January, but the company said “some major hurdles,” including getting approvals from each one of Canada’s provincial financial regulators, slowed down the process.
The acquisition marks the first time ever that Canadian regulators have reviewed a deal involving companies that are active in the DeFi space. As a result, the approval from all relevant regulators is potentially significant, as it opens up the door for a future regulatory framework for DeFi in the country.
For now, WonderFi was given full access to operate in the Canadian provinces of Alberta and British Columbia, while all other provincial regulators said they would further review WonderFi’s business, as well as continue to review the DeFi space more broadly.
“The combination of Bitbuy, Canada’s largest approved crypto trading marketplace, and WonderFi’s decentralized product line-up creates an innovative experience for our clients, and a globally competitive platform, positioned to enter new markets,” Michael Arbus, CEO of Bitbuy said.
Launched in 2016, Bitbuy is Canada’s first regulated crypto exchange. The exchange offers spot trading in bitcoin and a range of altcoins, and had a 24-hour volume of USD 2.6m at the time of writing, according to CoinMarketCap.
WonderFi Technologies is a publicly-traded company in Canada. The company is backed by strategic investors such as Canadian entrepreneur and TV personality Kevin O’Leary, as well as crypto exchange FTX founder & CEO Sam Bankman-Fried.
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