Coinsquare struck an agreement to acquire fellow Toronto-based crypto trading platform and competitor CoinSmart last fall. Now, Coinsquare wants to back out of that deal.
Per a January 9 press release from CoinSmart, Coinsquare “has delivered notice to CoinSmart purporting to terminate the Share Purchase Agreement dated September 22, 2022 between CoinSmart and Coinsquare.” When reached for comment, neither CoinSmart nor Coinsquare provided a reason for the move.
“Coinsquare exercised its rights to terminate the agreement with CoinSmart in accordance with its terms,” Coinsquare COO Eric Richmond told BetaKit, adding, “we have no other comments at this time.”
CoinSmart said Coinsquare’s move to terminate came as a surprise. “The notice of termination took the CoinSmart board and management by surprise as they had been given assurances by Coinsquare that the final regulatory approvals would be obtained this week,” CoinSmart co-founder and CEO Justin Hartzman told BetaKit, adding that the purported termination “has nothing to do with CoinSmart business or prospect.”
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He added that CoinSmart’s management and board of directors are in the process of evaluating the validity and effectiveness of Coinsquare’s notice. The company added that it will “provide further updates on this matter as additional information becomes available.”
About four months ago, amid the crypto market crash, Coinsquare reached a deal to acquire CoinSmart. Coinsquare claimed that the acquisition would create one of the country’s largest crypto asset trading platforms, at a time when another one of its competitors, WonderFi, has been scooping up other players in Canada’s crypto space.
As part of the transaction, which was initially expected to close during the fourth quarter, Coinsquare agreed to purchase all issued and outstanding shares of Simply Digital Technologies, the wholly-owned operating subsidiary of Neo Exchange-listed CoinSmart, for around $29 million in cash and shares.
Now, Hartzman said CoinSmart is “considering all options as it has been in a position to complete the transaction for many weeks already.” The CEO also claimed that, “as of now Coinsquare has not complied with their obligations under their own notice of purported termination.”
Feature image courtesy Coinsquare via Glassdoor.
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