Based on a report by Stone Bridge Ventures Senior Account Manager Robert Jones, the spokesperson for Canada’s Competition Bureau has responded to WonderFi CEO Dean Skurka. Skurka, who has called it a ‘miscommunication,’ said that the confusion comes from the fact that there was no objection.
In response, the Bureau’s senior spokesperson, John Power, said that companies should provide the government body with appropriate notice of a proposed transaction in some cases. While Skurka claims that the transaction was too small to ask for a notification, Power argues otherwise.
Bureau Spokesperson Argues Against ‘Miscommunication’ Claim
In a statement, he said that notice should be given if the target of acquisition has assets in Canada worth over $93 million or if it has generated that much revenue in the country. Similarly, the Bureau should be notified if the companies’ combined assets in Canada (or the revenues of the involved parties and their affiliates in Canada) are worth more than $400 million.
Robert Jones from Stone Bridge Ventures found the companies claiming that the merger deal would put together almost $600 million in combined assets within custody. All these assets come from a 1.65 million customer base, out of which 1.6 million are based in Canada.
Knowing that this claim would be used against him, Skurka said that if a client’s assets are currently under management, they don’t count as the company’s assets. Therefore, it’s not applicable to the Competition Bureau’s test to be notified in advance.
Upon hearing this, Power responded, saying that the Competition Bureau can review any merger or acquisition – no matter what the size. This is done so as to figure out if it will lead to a significant lessening of competition in Canada’s market. As of now, there’s no confirmation whether the Competition Bureau will take action on the deal between WonderFi and others.
As per Canada’s Competition Act, the Commissioner of Competition can challenge a transaction over a one-year period post-completion. Considering this fact, Robert Jones of Stone Bridge Ventures expects that the Bureau will challenge the merger deal. A major reason for this is how WonderFi has been acquiring multiple companies left, right, and center since early 2022.
WonderFi Plans To Consolidate Canada’s Crypto Sector
The plan is to combine Canada’s crypto sector into a giant conglomerate and compete against global giants that are operating in the country. It started by buying out Toronto-based companies BitBuy Technologies Ltd. and Coinberry Ltd. in 2022. Then, it went on to plan out the merger with Coinsquare and CoinSmart, both of which are based in Toronto as well.
Although WonderFi notified the Competition Bureau about the deal with Coinberry, this wasn’t the case when it purchased BitBuy Technologies. When asked about this, Skurka replied that WonderFi wasn’t entirely clear on whether they needed a review for these acquisitions. Early this month, he said that WonderFi would be shutting down CoinSmart in the next few months due to pending approvals from shareholders and regulatory bodies.
Now, Robert Jones of Stone Bridge Ventures predicts that it will shut down Coinberry, which is currently in the process of migrating customers and assets to BitBuy. With regard to this, he said that WonderFi had received a non-objection letter from the OSC.
