merger

Hut 8 merger would’ve happened even without FTX or crypto turmoil, says CEO

Falling crypto prices have forced many crypto miners to cut costs or consolidate in order to survive the crypto winter.

Crypto exchange FTX’s collapse and overall crypto market turmoil were not key factors in the decision to merge crypto mining firm Hut 8 with US Bitcoin Corp., according to Hut 8 CEO Jamie Leverton. 

On Feb. 8, Leverton said that the merger was mainly about providing diversified revenue and helping scale the combined businesses, stating:

“I think this deal would have happened regardless. The ability for us to bring these businesses together we think is so incredibly complementary.”

The all-stock merger was announced on Feb. 7, with the combined company — now called Hut 8 Corp. or “New Hut” — to be based primarily in the United States rather than Canada.

Regarding the collapse of FTXin November, Leverton said that fears were “starting to subside a little bit,” and interest was returning to the crypto industry.

She added, “I think we’re seeing a lot of interest come back into this space, we’ve seen significant appreciation across the space so far in 2023.”

Merging the two mining firms is “going to provide an incredible amount of scale,” she continued, adding that there will be “diversified revenue programs,” which is a good strategy for both companies independently.

New Hut will reportedly have access to around 825 megawatts across six facilities in New York, Texas, and Alberta province in Canada. Its total combined mining capacity will be 5.6 exahashes per second (EH/s).

Commenting on the choice of location, Leverton said that it was in the best interest of the business to have “diversified geographies,” adding:

“One of the advantages here is [that the merger is] giving us that geographic diversification. There’s uncertainty in regulatory environments on both sides of the border,”

Hut 8 has a mining facility in North Bay, Ontario, however operations have been suspended due to an ongoing court battle with its energy supplier.

US Bitcoin’s Niagara facility has issues of its own with an ongoing dispute with the City of Niagara Falls over complaints by residents regarding noise levels.

The firm provided more details on the merger in a presentation on Feb. 8. The transaction is expected to close in Q2, 2023, subject to shareholder, regulatory and stock exchange approvals.

Earlier this week, Leverton said that during the interim period, the firm plans to cover its operating costs through a combination of selling the Bitcoin it mines, and exploring various debt options.

Related: Bitcoin miner Hut 8 takes stoush with Ontario power supplier to court

Hut 8 stock slumped 8% on the day the merger was announced. Furthermore, according to MarketWatch, Hut shares had fallen 1.2% on the day to $2.12 in after-hours trading. The stock is currently trading 86% down from its November 2021 all-time high of $15.28.

Circle denies blaming SEC for shuttered $9B plan to go public

A Jan. 25 report from the Financial Times which was widely shared characterized Circle as having “blamed” the SEC for its “jettisoned” public listing plan.

A spokesperson for USD Coin (USDC) issuer Circle has denied reports that it blames the United States Securities and Exchange Commission (SEC) over its failed $9 billion plan to go public in December.

The stablecoin issuer representative was responding to a Jan. 25 Financial Times article that characterized Circle as having “blamed” the securities regulator for its “derailed” listing by dragging its feet on the approval of a merger agreement

However, a Circle spokesperson clarified to Cointelegraph that was not the case and that it doesn’t hold any blame over the SEC for the termination of its merger agreement.

“Circle has not and does not blame the SEC for anything related to the mutual termination of our SPAC merger agreement with Concord, and any statements to the contrary are inaccurate.”

Circle’s listing on the New York Stock Exchange (NYSE) was pegged on them being able to combine with Concord, a company set up by banker Bob Diamond via a Special Purpose Acquisition Company arrangement, also known as a SPAC deal.

However, according to the FT, Circle said the merger failed to be consummated as a result of the SEC not declaring the related S-4 registration effective in time, which would cause the agreement to lapse on Dec. 10.

Circle’s spokesperson, however, referred to previous statements made by the company in December, noting that “the deal simply termed out.”

Concord had not publicly disclosed a reason for the failed business combination, but filed an 8-K form with the SEC on Dec. 5  — the same day the deal was announced as terminated — which revealed that it was being delisted by the NYSE due to “abnormally low trading price levels.”

Related: Court to hear oral arguments in Grayscale’s lawsuit against the SEC in March

Indeed, in a Dec. 5 tweet, Circle co-founder and CEO Jeremy Allaire had nothing but positive words regarding the SEC and noted that while it was disappointing that they were unable to complete qualifications in time it was still planning on becoming a publicly listed company.

As Cointelegraph had previously reported, the deal was first announced in July 2021 at a valuation of $4.5 billion, before doubling last February, when it was revised up to $9 billion.

Crypto exchange WonderFi confirms merger talks with Coinsquare

The exchanges are yet to finalize the potential merger, with WonderFi releasing a public statement in response to market speculation and a surging share price.

Crypto exchange WonderFi, which is backed by crypto investor and billionaire Kevin O’Leary, has confirmed it is in preliminary discussions with fellow Canadian crypto exchange Coinsquare over a possible merger.

In a statement on Jan. 12, WonderFi responded to a Bloomberg report suggesting the two exchanges were in “advanced merger talks” to “create a Canadian crypto giant.”

WonderFi clarified that the discussions were “preliminary” at this stage, adding that it cannot guarantee that an agreement will be reached.

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“In response to the press speculation, the Company acknowledges that it has held preliminary discussions with various third parties with respect to both potential acquisitions and the Company being acquired, which is consistent with past practice and the Company’s general acquisition strategy.”

“These discussions are preliminary in nature and are ongoing, and no assurance can be given that any agreement or agreements will be reached, or that the terms of a transaction will be agreed upon or that a transaction will be completed,” it said.

WonderFi is headquartered in Vancouver, Canada, while Coinsquare is based in Toronto

A Bloomberg report on Jan. 12 said that although Coinsquare does not disclose assets under management, it is estimated to have 500,000 users on its platform.

WonderFi’s corporate overview from November. Source: WonderFi Q3 2022 investor deck

A potential merger of the two could see the combined entity serving 1.15 million users, making it the largest exchange in Canada. 

WonderFi is one of the few publicly traded exchanges in Canada and has seen its share price increase by nearly 30% over the last 24 hours following th merger speculation.

WonderFi share price from Jan. 5 to Jan. 12. Source: TradingView

News of the two exchange’s potential merger comes just days after Coinsquare terminated an agreement to acquire all the outstanding shares for a subsidiary of Canadian crypto exchange CoinSmart, a deal that CoinSmart announced on Sept. 22 that would have seen them receive $3 million cash and over $26 million in Coinsquare shares as payment.

WonderFi also had a busy year of acquisitions in 2022, acquiring fellow Canadian crypto exchange Bitbuy’s parent company for $162 million and crypto exchange Coinberry for $38 million.

Related: Cryptocurrency is headed toward surviving its first age

In an interview at the time, O’Leary had mentioned that there would be ”several more and even bigger” acquisitions on the way.

It most recently acquired North American blockchain development firm Blockchain Foundry on Sept. 1, which recently launched a nonfungible technology (NFT) minting platform and marketplace, as well as a Web3 learning platform.

Blockchain fintech GammaRey signs $320M merger agreement

GammaRey said it has nearly $800 million in consumer assets.

According to a Jan. 3 announcement, blockchain fintech firm GammaRey has signed a merger agreement with financial e-commerce and consumer data analytics company GoLogiq. Both companies are based in the U.S., although GoLogiq focuses on customers in Southeast Asia. 

As stipulated by the terms, GoLogiq will issue $320 million in common stock to acquire 100% of GammaRey’s outstanding shares. The transaction is anticipated to be completed within the next few weeks, subject to conditions. The two parties said the merger aims to “focus on the high-growth market of wealth management for Generation Z and Millennials.” Brent Suen, chairman of GoLogiq, commented:

“Through this highly synergistic merger, we will have achieved our goal for GoLogiq to become a comprehensive fintech platform for underserved businesses and consumers that is generating strong revenue growth and cash flow.”

Suen also disclosed that GoLogiq is in the late stages of completing a new acquisition target with more than $9 billion in managed assets introduced by GammaRey. The two parties have set a guidance of more than $50 million in annualized revenue for 2023 upon deal completion.

Based in New York, GammaRey focuses on consumer digital wallets and developer software. The private company said that it is a “profitable business with strong cash flow” and nearly $800 million in consumer assets. Following the merger, GoLogiq stock will continue to trade over-the-counter under the ticker GOLQ, but the companies said that may change:

“GoLogiq also plans to apply for an uplisting to a listed exchange, such as Nasdaq or the NYSE. Such an application would be subject to approval based on several factors, including satisfaction of minimum listing requirements.”

Superhero cans merger with Swyftx, citing regulatory scrutiny

Australian investing platform Superhero assured users that their funds are safe and that neither their personal data nor assets were provided to crypto exchange Swyftx.

With more regulators eyeing the crypto space as the FTX debacle continues, the $1.5 billion merger of Australian online investing platform Superhero with Australian crypto exchange Swyftx has been shelved. 

In an email to customers, Superhero said it will not be proceeding with the merger because of heightened regulatory scrutiny of crypto within Australia and globally, writing:

“As a result of the current environment, we have decided that the best thing for our Superhero customers is to unwind the merger and move forward as a separate, unrelated company.”

The firm also assured users that their funds are safe, as neither their data nor their assets were provided to Swyftx.

The companies first announced the merger on June 8, revealing plans to enable trading between traditional and crypto assets. Back then, Swyftx co-CEO Ryan Parsons told Cointelegraph that the long-term goal for the merger was to explore interoperability between asset classes. However, things did not work out as planned.

Months later, the crypto exchange announced several layoffs. On Aug 19, the firm cut its staff by 21%, citing the bear market, inflation and a potential global recession. On Dec. 5, the firm announced that it has laid off another 35% of its employees, saying that while it wasn’t exposed to FTX, it was “not immune” from the fallout.

Related: No more proof-of-reserve checks? Auditors quietly drop crypto projects from portfolios

After hearing about the layoffs, crypto community members reacted with various sentiments. One said it was bound to happen and that more bankruptcies may follow. However, another gave Swyftx some encouragement, saying that good things wercoming.

Meanwhile, former FTX CEO Sam Bankman-Fried, who is currently in jail, has signed extradition papers. This means that he’ll be turned over to the Federal Bureau of Investigation to face criminal charges in the United States.

Bitcoin Depot says SPAC merger will continue as planned after solid revenue growth

The firm’s revenue increased by 25.25% to $497.2 million in the first nine months of 2022.

According to a new filing with the U.S. Securities and Exchange Commission on Dec. 1, crypto ATM operator Bitcoin Depot said it “remains on track to complete its previously announced business combination with GSR II Meteora Acquisition Corp.”

The merger with the special purpose acquisition vehicle, or SPAC, is scheduled to occur in the first quarter of 2023, subject to shareholder and regulatory approval. Bitcoin Depot estimates that the deal will infuse the company with up to $170 million in cash proceeds net of debt repayment. 

In its earnings report for year-to-date financials that ended Sept. 30, released the same day, Bitcoin Depot disclosed that its revenue grew by 25.25% year over year to $497.2 million. However, the company barely broke even with $4.622 million in net income compared to $9.587 million for the first nine months of 2021, partly due to a sharp increase in interest expense. Commenting on the results in the context of the recent market turmoil, Brandon Mintz, CEO, and founder of Bitcoin Depot, stated:

“We believe we stand apart from the industry with limited direct crypto exposure, robust compliance procedures and secure transactions that give users control of their purchased crypto, compared to other methods of transacting in crypto where users rely on third parties to custody their crypto.”

Founded in 2016, Bitcoin Depot is currently the largest Bitcoin ATM operator in North America, with over 7,000 kiosks and a 19% market share in the U.S. On August 24, 2022, Bitcoin Depot and GSR II Meteora Acquisition Corp announced their merger to take Bitcoin Depot public on the U.S. Nasdaq exchange under the ticker symbol BTM.

Ripple to consider deals for FTX assets: Brad Garlinghouse

Brad Garlinghouse, CEO of Ripple, said the company would be interested in companies owned by FTX that serve business customers.

Ripple CEO Brad Garlinghouse is reportedly interested in buying certain parts of collapsed crypto exchange FTX.

On the sidelines of Ripple’s Swell conference in London — was held on Nov. 16 and 17 — Garlinghouse told The Sunday Times that former FTX CEO Sam Bankman-Fried called him two days before the company filed for bankruptcy as he sought to round up investors to rescue the business.

The Ripple CEO said that during the call, the two discussed if there were FTX-owned businesses that Ripple “would want to own.”

“Part of my conversation was if he needs liquidity, maybe there’s businesses that he has bought or he has that we would want to own […] Would we have bought some of those from him? I definitely think that was on the table,” he said.

However, Garlinghouse admits that now that FTX has filed for Chapter 11 bankruptcy in the United States, a potential transaction for an FTX business will be “very different than it would have been one-to-one.”

“I’m not saying we won’t look at those things – I’m sure we will. But it’s a harder path to transact,” he added.

Approximately 130 companies affiliated with FTX, including FTX.US, were included in the bankruptcy filing in Delaware.

Some subsidiaries not included in the proceedings include crypto clearinghouse LedgerX, FTX Digital Markets, FTX Australia Pty and payments processor FTX Express Pay.

Garlinghouse said he would be interested in buying the parts that served business customers.

Cointelegraph has reached out to Ripple for additional comment but has not received a response by the time of publication.

Related: Sam Bankman-Fried updates investors: ‘We got overconfident and careless,’ claims $13B leverage

It appears that Ripple’s executives, like many in the industry, are following the latest developments of the FTX saga.

On Nov. 10, Ripple chief technology officer David Schwartz directed a message on Twitter toward employees of FTX, suggesting that there would be room at Ripple for them, so long as they aren’t “involved in compliance, finance or business ethics.”

FTX has recently appointed restructuring administration firm Kroll as its agent to track all claims against FTX and ensure interested parties are notified of developments throughout its Chapter 11 bankruptcy case.

Crypto-stock trade pairs in the cards as Swyftx inks $1.5B merger with Superhero

Speaking to Cointelegraph on Wednesday, Swyftx co-CEO Ryan Parsons revealed that its long-term plans are to explore ways to offer trading between traditional and crypto asset classes.

Australian crypto exchange Swyftx wants to eventually offer seamless trading between traditional and crypto-asset classes, with its first step being the completion of its $1.5 billion merger deal with online investing platform Superhero. 

The deal to combine the two was revealed on June 8, with the merged entity set to become the first in Australia to offer both decentralized and traditional finance.

Speaking to Cointelegraph on Wednesday, Swyftx co-CEO Ryan Parsons revealed that one of its longer-term goals is to explore “greater interoperability between asset classes.”

“You can imagine customers trading their Bitcoin or other digital assets for equities in listed companies like Tesla, and vice versa.”

Parsons said that its first priority will be to work with regulators and set up appropriate customer protections:

“But it’s important to be clear that we’re working through all the regulatory requirements in what is already a quickly evolving regulatory landscape. We’re extremely keen to ensure that whatever we do, is done properly with appropriate customer protections in place.”

Related: Aussie consumer group calls for better crypto regs due to ‘lagging laws’

While the merger news appeared to come without any prior warning, Parsons said it was “no surprise” that a number of equity trading platforms have been looking to offer crypto trading and vice versa, and that discussions with Superhero about a merger had been underway for several months prior:

“The two teams have been actively talking for a few months, with the merger following out of initial discussions around the potential for a crypto-equities partnership opportunity. It just made more sense to join forces than to be partners.”

Co-founded by Alex Harper and Angus Goldman in 2018, Swyftx is an Australian crypto exchange, offering 320 digital currencies and crypto interest-earning products. The company’s exchange saw a banner year in 2021, growing its investor base by nearly 1,200% to over 600,000 retail and corporate investors.

Superhero, an online broker, was founded in the same year, but launched only in late 2020. Over the last 12 months, the company has grown its investor base by more than 600% to over 200,000 investors, allowing them to trade Australian and U.S. stocks, as well as manage their Superhero superannuation (Australia’s version of 401K) a product launched in July 2021.

In a statement on June 8, Swyftx said the completed merger would create a combined customer base of 800,000 when it’s completed around mid-2023.

The combined platform will allow customers to trade and invest across cryptocurrencies, equities and superannuation. Later, Parisons said the company wants to build out its product offerings, which could include banking-type services or other traditional finance products and services.

Following the merger, Swyftx co-founder Alex Harper and current Swyftx CEO Ryan Parsons will become co-CEOs of the combined entity. John Winters will head up the traditional financial services arm and take a position on the board of directors.

Winters told the Sydney Morning Herald on Tuesday evening that there was a possibility of listing the combined entity on the Australian stock exchange once the merger is tied off, but said there would be “a lot of work to be done before we get to that stage.”

Winters stated that, for the time being, the two platforms will continue to operate independently of each other, and no job losses are expected as part of the merger.