CoinSmart generated $16.7 million in revenue in 2021, as retail trading volumes increased during the Bitcoin bull markets. Canada’s crypto-exchange landscape seems to be consolidating following the acquisition of Coinsquare, the largest platform for digital asset trading in the country, for an undisclosed sum.
Coinsquare announced Thursday that it has entered into a definitive deal to acquire all outstanding and issued shares of Simply Digital, CoinSmart’s wholly owned subsidiary. Coinsquare will be owned by CoinSmart on a pro forma basis, with a roughly 12.5% ownership stake.
The shares of CoinSmart, which trades on the NEO Exchange on Friday, rose 67% in response to the news.
After the acquisition, Coinsquare will become Canada’s largest crypto exchange
This acquisition makes Coinsquare Canada’s largest cryptocurrency exchange and increases its operational and business capabilities. Coinsquare was founded in 2014 and has since expanded its services to include institutional and retail trading, crypto payment processing, and digital asset custody.
Justin Hartzman was the co-founder of CoinSmart in 2018. He also served as the company’s CEO. Hartzman will join Coinsquare’s executive staff following the acquisition.
CoinSmart is a publicly traded company and releases its financial statements every quarter. The company’s annual summary was released April 1 and showed $16.7 million in total revenue for 2021. This is a 357% increase year-over-year. The increase in retail trading volume was likely due to the Bitcoin ( BTC ) bull market.
Coinsquare is among the two Canadian crypto exchanges that have pre-registered with their regulators in order to ensure full compliance with securities laws. Pre-registration requirements have been established by Canadian Securities Administrators (CSA) and allow crypto exchanges that are still operational to file their full applications with CSA.
Eric Richmond, chief operating officer of Coinsquare, explained to Cointelegraph that the cryptocurrency exchange was registered with Canada’s Investment Industry Regulatory Organization (IROC) in November 2020.
Although crypto adoption is increasing in Canada, it is still largely dependent on market conditions. KPMG’s survey found that adoption is increasing in institutional circles because of crypto’s perceived upsides and innovative potential.
