After buying up several regulated Canadian crypto exchanges, WonderFi eyes down under for growth.
Toronto cryptocurrency company WonderFi has reached a deal to purchase an entity registered to provide crypto trading services in Australia.
International expansion has become a focus for WonderFi again as market conditions have improved.
WonderFi is acquiring FX Institutions Pty. Ltd. (FXI), a business set up to launch a crypto exchange in Australia that never did, giving WonderFi its first crypto licence outside of Canada. WonderFi declined to disclose the financial terms of the non-dilutive deal, which it expects to close in the next few weeks and remains subject to regulatory approval.
With FXI’s licence, WonderFi plans to roll out its over-the-counter crypto trading services to Australians in the second quarter, and a more comprehensive suite of offerings for retail and institutional digital assets investors across the country during Q3 2024.
In an exclusive interview with BetaKit, WonderFi CEO Dean Skurka said that international expansion—which the Toronto Stock Exchange-listed firm deprioritized during the crypto downturn—has become an important part of WonderFi’s growth strategy again now that market conditions have improved.
“Having come through a transformative year with significant tailwinds behind us, a strong balance sheet, and a healthy crypto market, we felt like it was the right time to continue to build out on our successes locally,” said Skurka.
FXI is registered to provide crypto trading and payment remittances in Australia. According to Skurka, Australia was a “natural” expansion target for WonderFi given its high crypto adoption rates, strong digital asset community, and regulatory landscape, while buying FXI marked “a very clean entry point” into the country. BetaKit has reached out to FXI for additional comment, but the company has not responded by publication time.
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This is far from the first time that merger and acquisition (M&A)-focused WonderFi has inked a deal to buy another licenced crypto trading entity: WonderFi has either wholly acquired or purchased assets from five of Canada’s 11 regulated crypto exchanges, including Bitbuy, Bitvo, Coinberry, Coinsquare, and CoinSmart, which all permit users to buy, sell, and trade a variety of digital assets, including Bitcoin and Ethereum.
In a push to cut expenses and achieve economies of scale amid rising regulatory compliance and customer-acquisition costs, WonderFi has laid off staff and migrated Bitvo, Coinberry, and CoinSmart’s users to Bitbuy, which it continues to operate alongside Coinsquare and its global crypto payments business, SmartPay.
In the coming months, Skurka said WonderFi plans to bring Bitbuy and Coinsquare’s more than 1.6 million clients to a single platform.
“Clearly, M&A has been part of our overall strategy,” said Skurka. “We believe we’ve done a really good job at consolidating the Canadian market … with now meaningful share in this market, our focus has started to shift to international markets.”
RELATED: WonderFi, Coinsquare, CoinSmart merge as landmark Canadian crypto deal closes
During the so-called crypto winter, Skurka acknowledged that international expansion became less of a priority of WonderFi. But now, with conditions improving, he believes the timing is right for WonderFi to resume focus on growing abroad and apply some of the lessons it has learned in Canada to other countries, starting with Australia.
“We believe that the strategy has been validated in Canada, we clearly have a proven ability to attract trading volumes, staking activity, total client assets, [and] client account signups, both on [a] retail and institutional basis and feel like all of the experience that we have internally is really going to have a positive impact in the Australian market,” argued Skurka.
Skurka takes encouragement from the recent uptick in crypto prices and retail and institutional trading volumes, as the industry has begun rebounding following a particularly tough 2022 and 2023 that saw digital asset values and many unregulated platforms collapse. Some of this rise has been fuelled by recent Bitcoin ETF approvals in the United States (US). Amid these conditions, Bitbuy and Coinsquare recently surpassed $1.5 billion in combined client cash and digital assets under custody.
In the coming months, WonderFi plans to bring Bitbuy and Coinsquare’s clients to a single platform.
WonderFi’s CEO sees lots of similarities between Australia and Canada. According to Skurka, the Australian crypto market is “fragmented” and its legal environment “looks and feels where Canada was a few years ago in terms of really committing to the industry, building out regulatory frameworks for [crypto] companies to abide by and grow within.”
WonderFi recently appointed Deutsche Bank and HSBC alum Tim Lo as head of sales in the Asia-Pacific region and tasked him with spearheading the firm’s go-to-market strategy in Australia, where its marketing partner will be Kogan.com—the company that Bitbuy bought its domain from back in 2021.
“The plan will be to apply all the experience and our track record of improving investor access to cryptocurrencies to Australian residents,” said Skurka. WonderFi plans to lean on its existing staff and build out a presence locally
Skurka added that WonderFi plans to continue evaluating other international expansion opportunities in countries with a “clear regulatory environment” for crypto trading that are interested in working with industry players, and sees Australia as a “solid foundation” for these efforts. Skurka confirmed that the US remains on WonderFi’s radar.
Feature image courtesy WonderFi.
