Crypto giants look to buy assets from failed crypto exchange

by Arthur · September 1, 2022

FN Media Group presents market commentary from Microsmallcap.com

NEW YORK, 1 September 2022 /PRNewswire/ — The crypto bear market isn’t so bad after all. It turns out the downturn gives excellent opportunities for expansion through mergers and acquisitions (M&A). According to Needham’s senior analyst John Todaro, valuations of public crypto companies have fallen around 70% this year. The sector is also in the middle of a crypto crash, which has wiped out all around 2 trillion dollars in value in recent months, meaning crypto companies are cheaper now than they were a year ago when the sector was in full recovery. Voyager Digital, the lender whose bankruptcy compounded this year’s crypto market crisis, is attractive interest from some of the biggest players in the area, including exchanges Binance and FTX. FTX and Ripple Labs still have M&A in the pipeline for 2022, however WonderFi Technologies Inc (TSX:WNDR) (OTCQB:WONDF) was one step ahead when earlier this year it acquired Bitbuy and Coinberry, two of Canada’s six registered crypto trading platforms. Cabin 8 Mining (NASDAQ:HUT) (TSX:HUT), CleanSpark (NASDAQ:CLSK), Galaxy Digital (TSX:GLXY), and Riot Blockchain (NASDAQ:RIOT) is also making acquisitions or looking for interesting deals in the crypto space.

WonderFi Technologies Inc (TSX:WNDR) (OTCQB:WONDF) is a technology company that provides greater access to digital assets through centralized and decentralized platforms.

On 4th of July, WonderFi technologies finished its previously announced acquisition of Coinberry, one of Canada’s leading crypto asset trading platforms registered with the Canadian Securities Administrators (CSA) and the first pure-play licensed crypto broker in Canada.

“This acquisition further strengthens WonderFi as a leader among crypto companies in Canadaand together with the acquisition of Bitbuy, it establishes a good foundation for our expansion into global markets,” so WonderFi CEO Ben Samaroo. “Furthermore, as we have seen in recent weeks, the downturn in the crypto market has had a massive impact on the viability of unregulated crypto trading platforms, and WonderFi’s value proposition as one of the few regulated crypto businesses makes us well positioned to continue our growth.”

With this acquisition WonderFi will be the first company in Canadaand one of the first in the world, to own and operate multiple licensed crypto-asset exchange platforms regulated by applicable securities commissions.

Coinberry also adds over 225,000 users and 99.5 million dollars in client funds in custody per 31 March 2022gives WonderFi group of companies over half a billion dollars in approximate total client assets under custody at the time of acquisition.

WonderFi plans to realize significant cost synergies by integrating a number of functions across the Coinberry and Bitbuy businesses, developing cross-selling services, and improving the user experience by continuing to innovate its suite of product offerings.

On July 15, WonderFi announced a partnership with the Meta Venture Capital Partnerships team, a division of Meta Platforms, Inc.

To help the most innovative firms scale, Meta Partnerships was founded in 2020. The goal is to connect them with Meta’s resources and brands, such as Facebook and Instagram. WonderFi will receive strategic guidance from Meta Partnerships on matters such as marketing, performance and business scale, as well as on collaboration strategies with other Meta departments and privacy-related regulations.

For more information on WonderFi Technologies Inc (TSX:WNDR) (OTCQB:WONDF), click here.

Crypto companies are actively pursuing acquisitions

Of course, WonderFi is not the only crypto company looking to expand its share of the market through mergers and acquisitions.

Earlier this year, Hut 8 Mining (NASDAQ:HUT) (TSX:HUT) a leading innovator in digital asset mining i North America with a focus on innovation, supported open and decentralized systems since 2018, close its definitive agreement to acquire TeraGo Inc.’s cloud and colocation data center business. The acquisition includes a comprehensive information technology solution that includes a full range of scalable cloud services, increased operation of five data centers across Canadaand other related items. Cabin 8 becomes a high-performance computing platform as a result of the acquisition, giving the company a distinct position within the digital asset ecosystem.

On 19th of AugustAmerica’s Bitcoin Miner CleanSpark (NASDAQ:CLSK) announced that the agreement to buy an active bitcoin mining facility in Washington, Georgia has closed. When all 86 MW of mainly carbon-free power are fully operational in 2023, the plant is expected to increase CleanSparkits hashrate by 2.6 EH/s. Since bitcoin mining improves the web’s resilience for nearby communities that Washington, Georgiait is crucial to CleanSparkits ESG obligations. About 20 additional employees will be employed by the company as part of the facility expansion, the majority of whom will be resident in Washington and the neighborhood. On September 8, CleanSpark will hold an open house at the new location for interested residents, members of the local press and community leaders.

Keep in mind that not all crypto companies move forward with M&A plans. On 15 August, Galaxy Digital (TSX:GLXY) announced that it had exercised its right to terminate its previously published acquisition agreement with BitGo because BitGo had not delivered audited accounts for 2021 by 31 July 2022, as required by the agreement between two companies. There is no termination fee associated with the termination. After completing the SEC assessment, Galaxy Digital plans to carry out the proposed reorganization and domestication to become one Delaware-based business and then listing on Nasdaq.

Riot Blockchain (NASDAQ:RIOT) reported total income of 72.9 million dollars for the ended three-month period 30 June 2022an increase of 112% from 34.3 million dollars for the same three-month period in 2021. Mining revenues increased by 47% more 46.2 million dollars in Q2 2022, from 31.5 million dollars for the previous quarter, due to an increase in the number of BTC mined. Riot reported data center hosting revenue at 9.8 million dollars for the three months ended June 30thafter the acquisition of Whinstone US in the second quarter of 2021. Revenues from the engineering segment were 16.9 million dollars in the quarter, following the acquisition of ESS Metron in the fourth quarter of 2021. Riot increased BTC production volume by 107% to 1,395 BTC in Q2 2022, from 675 BTC in Q2 2021. The company increased $267.0 million in net proceeds from the sale of approx. 30.6 million shares on Riot ordinary shares through our previously announced share offer, further strengthening Riotits industry-leading financial position, in difficult market conditions for the sector.

WonderFi technologies ordinary shares began to act on the OTCQB® Venture Market at 17 August 2022. The company also has submitted an application to list its ordinary shares on the Nasdaq Capital Market® (NASDAQ).

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