.png "WonderFi Obtains Crypto Trading Platform Coinberry")
WonderFi has completed the acquisition of regulated crypto trading platform Coinberry, as the company seeks to capitalize on current market conditions. The CEO of WonderFi referred to the failure of unregulated crypto lenders as “WonderFi’s thesis paying out in real-time.”
Crypto Market Mayhem
Ben Samaroo, WonderFi’s CEO and co-founder, always wanted WonderFi to be as big as the now-defunct Voyager Digital, which had a market capitalization of nearly $3 billion. However, the crypto market turmoil has resulted in the loss of over $2 trillion in value, with several crypto lenders, including Vauld, Celsius, BlockFi, Voyager Digital, and Genesis, struggling to remain solvent as the crypto market remains volatile.
The companies in question have halted withdrawals, citing extreme market conditions that have resulted in a liquidity crisis. Some of these companies have become targets for larger corporations, with their valuations plummeting to a fraction of their previous levels, while others, such as Voyager Digital, have announced bankruptcy after having significant exposure to the failed 3AC.
A Market Chance
The WonderFi CEO believes that the current market turmoil, particularly in the unregulated crypto space, will benefit the company in the long run, with the collapse of these firms making room for an unregulated firm like WonderFi. Unlike its competitor Voyager Digital, which offers both crypto trading and lending, which is far riskier, WonderFi has concentrated on trading due to its regulated status in Canada. In response to Voyager Digital’s decision to focus on crypto lending, WonderFi’s CEO said: That’s something they took on for faster, higher growth, and it obviously backfired. It’s essentially [WonderFi’s] thesis playing out in real-time, which is compliant and regulated, Samaroo explained. We couldn’t have done something like that if we weren’t regulated by the [Ontario Securities Commission].
However, he stated that WonderFi is willing to experiment with lending in a regulated environment.
A Docile Crypto Ecosystem
Through a series of acquisitions, WonderFi hopes to build a compliant crypto ecosystem that includes DeFi, NFTs, Crypto Trading, and gaming. Earlier in 2022, WondeFi paid CAD 206 million for BitBuy, Canada’s first regulated crypto marketplace that was registered with the Canadian Securities Regulators.
WonderFi acquired another licensed crypto platform, Coinberry, in a deal worth more than CAD 38 million. Coinberry completed the transaction after reaching an agreement with Cinaport Acquisition Corp. Given increased regulatory pressure and rising customer acquisition costs, Samaroo predicts further consolidation in the crypto space, with other lenders such as BlockFi and Vauld becoming targets for acquisitions. WonderFi will seek more acquisitions as lower valuations make other companies more appealing targets.
Crash Has Affected WonderFi
Despite the acquisitions, WonderFi has been impacted by the crypto crash. BitBuy, which the company acquired earlier this year, has seen a significant drop in trading activity and prices, as well as an increase in volatility. As a result, WonderFi was forced to lay off 18% of its workforce. Samaroo speculated on the possibility of additional layoffs following Coinberry’s acquisition, saying: We’ll evaluate, but I believe there’s a lot of room for these operational synergies across all departments.
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