CoinSmart Follows FTX’s Footsteps, Is Looking To Acquire Distressed Crypto Firms
- The Toronto-based renowned crypto asset trading platform, CoinSmart Financial Inc., aims to acquire crypto firms at lower prices in Canada, Europe, and the US.
- Justin Hartzman, the CEO of the company, has found multiple spots full of opportunities in the current market situation, a move similar to FTX CEO Sam Bankman-Fried
Amid the ongoing crypto winter season when companies are filing bankruptcies, Toronto-based renowned crypto assets trading platform CoinSmart Financial Inc. is seeking deals in Canada, Europe, and the United States.
According to the CEO of the company, Justin Hartzman, the company finds multiple spots full of opportunities in the current market situation. A report by Bloomberg reveals that CoinSmart is shifting through distressed assets, custodial-services firms, and other exchanges and payment platforms.
Hartzman said he finds M&A an “interesting thing” where he spent a lot of time. The high cost of regulation gives the company an opportunity “to jump in and find some properties or some targets that are really advantageous to our growth there.”
Similarly, Sam Bankman-Fried, the CEO of FTX, has been helping destressed crypto firms regain liquidity and getting good deals as a result. The CEO even acquired stake in Robinhood.
In Canada, OSC makes it mandatory for platforms that facilitate trading in securities, instruments, or contracts involving digital assets to register as dealers and eventually join the Investment Industry Regulatory Organization of Canada.
On the other hand, the Securities and Exchange Commission’s investigation of Coinbase in the United States is raising concerns that a significant crackdown on the rest of the industry is about to happen. Regulators continue to argue over which tokens qualify as securities. It would be difficult for the industry to declare that for certain tokens because using such a label would strict investor protection regulations requirement.
Due to the complicated business environment created by the fragmented rules, CoinSmart does not currently provide its services to US investors. According to Hartzman, a lack of uniform regulation is impeding US growth and product development.
CoinSmart also affected by the ongoing market crash
The market crash that sent several lenders and hedge funds, like Three Arrows Capital, into bankruptcy hasn’t spared the company. CoinSmart’s market capitalization is now only C$14 million ($11 million), having lost approximately three-quarters of its worth in 2021.
But according to Hartzman, difficult times offer CoinSmart the chance to consider its strengths and weaknesses. According to him, “almost 56% of volume retail dropped globally across all platforms.”
CoinSmart, which is publicly listed in Toronto and Frankfurt, had transactions worth more than C$1 billion last year and has 250,000 registered customers. In November 2021, when crypto trading was on the rise, the company went public after registering as a securities dealer with the Ontario Securities Commission.