Canadian cryptocurrency firms WonderFi Technologies (WNDR) and Coinsquare are holding talks concerning a potential merger, according to multiple media reports.
WonderFi’s stock jumped more than 20% and trading in the shares was briefly halted after news broke of the merger talks. WonderFi issued a statement acknowledging that it has held “preliminary discussions” concerning a potential acquisition.
“These discussions are preliminary in nature and are ongoing, and no assurance can be given that any agreement or agreements will be reached,” WonderFi said in a written statement.
A merger of WonderFi Technologies and Coinsquare would create the largest cryptocurrency exchange in Canada. A potential deal comes days after Coinsquare terminated a potential takeover by crypto firm Coinsmart Financial.
A combined WonderFi Technologies and Coinsquare would have 650,000 users and $258 million worth of assets under management.
Publicly traded WonderFi currently has a market capitalization of $51 million U.S., while privately held Coinsquare has been valued at between $250 million and $350 million.
The timing of a merger between Coinsquare and WonderFi comes at a difficult time for the cryptocurrency industry following the $8 billion U.S. bankruptcy of American crypto exchange FTX last November.
Some analysts say that the market for digital coins and tokens has now entered a “crypto winter.”
WonderFi’s stock has declined 52% over the last year to now trade at 31 cents, making it a penny stock.
