Coinsquare acquires the listed crypto exchange CoinSmart

by · September 23, 2022

Coinsquare acquires the listed crypto exchange CoinSmart

Canada’s crypto exchange landscape appears to be consolidating after Coinsquare, one of the largest digital asset trading platforms in the country, acquired CoinSmart for an undisclosed amount.

On Thursday, Coinsquare announced that it had entered into a definitive agreement to purchase all of the issued and outstanding shares of CoinSmart’s wholly-owned subsidiary Simply Digital. Once the deal is final, CoinSmart will have an approximately 12% 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.

The acquisition makes Coinsquare one of Canada’s largest crypto exchanges and expands its operational and business capabilities. Founded in 2014, Coinsquare has expanded its service offering to include retail and institutional trading, crypto payment processing and digital assets.

CoinSmart was co-founded in 2018 by Justin Hartzman, who also served as the company’s CEO. Following the acquisition, Hartzman is set to join Coinsquare’s management team.

As a publicly traded company, CoinSmart discloses its accounts quarterly. In its annual summary released on April 1, the company reported $16.7 million in gross revenue in 2021, a 357% year-over-year increase. Retail volume grew by 875%, likely reflecting the Bitcoin (BTC) bull market of 2021.

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Coinsquare is one of only two crypto exchanges operating in Canada to pre-register with its key regulators as they work towards full compliance with securities laws. The pre-registration requirements were established by the Canadian Securities Administrators, or CSA, and allow crypto exchanges to remain operational while their full applications with the CSA are being reviewed.

In an interview with Cointelegraph on the sidelines of the Futurist conference in Toronto in August, Coinsquare COO Eric Richmond explained that the crypto exchange was registered with the Investment Industry Regulatory Organization of Canada, or IIROC, in November 2020.

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Crypto adoption in Canada is on the rise, but as in other countries, participation is largely based on underlying market conditions. According to a KPMG survey, adoption is also growing within institutional circles due to crypto’s perceived upside and innovative potential.