Wonderfi Technologies Inc. (TSX: WNDR) is making a bid to be among the biggest cryptocurrency exchange companies in Canada with its latest string of acquisitions.
The company’s subsidiary, Bitbuy Technologies, purchased the client accounts of Calgary-based Bitvo Inc and the Bitvo.com domain, adding it to the long lineup of acquisitions the company has made since April.
WonderFi significantly bolsters its market presence by integrating Bitvo, which had over 17,000 customer accounts and exceeded a trading volume of $235 million last year. This move not only increases the company’s scale but also diversifies its client base, as Bitvo possesses a strong institutional clientele.
Bitbuy has acquired all Bitvo client accounts, encompassing both retail and institutional clients. It now plans to manage these accounts and their associated trading volumes and net revenues for the benefit of WonderFi.
The company made an upfront pre-payment to Bitvo and will share 50 per cent of the net revenue generated from these acquired client accounts, subject to specified conditions and net revenue maximums.
The company has also purchased the Bitvo.com domain as part of the transaction. Bitbuy has not assumed any of Bitvo’s operations or corporate liabilities in this acquisition. Prior to completing the transaction, the cryptocurrency firm received non-objection letters from relevant securities regulators. Bitvo client accounts need not take any action, as their accounts and funds will be securely migrated to the Bitbuy platform.
“The acquisition of Bitvo’s clients represents a non-dilutive acquisition for Wonderfi, with immediate cash flow, increased scale and an expected payback period of less than six months,” said Dean Skurka, the CEO of Wonderfi.
“This acquisition also accelerates our growth efforts and diversifies our client profile with Bitvo’s strong institutional client base. We look forward to working with the Bitvo team to ensure a smooth transition.”
Wonderfi is dedicated to ensuring a smooth transition for Bitvo client accounts and commits to making it as seamless as possible. Bitvo client accounts do not need to take any action, as their accounts and funds will securely migrate to the Bitbuy platform. Throughout the process, client accounts can anticipate clear communication and ongoing support to facilitate the transition. Further information regarding their accounts and the transaction will be provided to all Bitvo client accounts.
Consolidation raises questions about consumer choice
The consolidation raises concerns about reduced market competition and choices for consumers. WonderFi owns five out of the eleven registered crypto-trading platforms in Canada, potentially limiting diversity and affecting pricing for Canadian crypto traders.
Simultaneously, the Canadian crypto market is changing. U.S. platforms like Coinbase Global Inc. (NASDAQ: COIN) are entering Canada, while Binance and Bybit have exited. This shows increased interest from international players, which could challenge WonderFi’s dominance.
Additionally, it’s essential to consider the broader North American context. The U.S. and Canada together account for around 24 per cent of global crypto transactions, emphasizing Canada’s significance in the global crypto landscape.