Coinsquare acquires publicly-traded crypto exchange CoinSmart

Canada’s crypto exchange landscape appears to be consolidating after Coinsquare, one of the country’s largest digital asset trading platforms, 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 own approximately 12% of Coinsquare on a pro forma basis.

Shares of NEO-listed crypto exchange CoinSmart surged 67% on Friday, largely in response to the news.

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

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

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

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

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 registered with the Investment Industry Regulatory Organization of Canada, or IIROC, in November 2020.

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