CoinSmart Is on the Hunt to Buy Distressed Crypto Assets
Nicholas Otieno Aug 04, 2022 07:05
The recent market crash is the latest in global financial events that have created unique opportunities for buyers like CoinSmart and FTX wanting to acquire distressed crypto firms at a bargain valuation.
CoinSmart Financial Inc., a crypto asset trading platform based in Toronto, Canada, announced on Wednesday that it is on the hunt to buy crypto startups in Canad6a, Europe, and the US, according to Bloomberg.
In an interview, CoinSmart Chief Executive Officer Justin Hartzman said that the crypto-asset trading platform is sifting through distressed assets, custodial-services companies, and other exchanges and payment platforms.
“M&A is an interesting thing, something that I spend a lot of time on. The high cost of regulation — or lack of regulation — allows the firm to jump in and find some properties or some targets that are really advantageous to our growth there,” the executive stated.
Hartzman said the ongoing turmoil times have allowed CoinSmart to reflect on the strengths and weaknesses of the company. “Across the board, over 56% of volume retail dropped internationally across all platforms,” he said. “We’re closer to a 30% reduction in volume.”
From the look, CoinSmart is using this market correction to buy distressed assets for cents on the dollar to revamp its business or initiatives it is planning on building for the next few years.
By leveraging its cash and corporate balance sheets to execute distressed asset purchases, CoinSmart is coming up with new and creative ways to expand its portfolio across the crypto ecosystem.
The Toronto-based firm has not been immune to the market plunge that has pushed some lenders and hedge funds, such as Celsius Networks, Voyager Digital, and Three Arrows Capital, among others, into bankruptcy.
According to Hartzman, CoinSmart’s shares have lost about three-quarters of their value this year, shrinking its market capitalization to just C$14 million ($11 million).
So far, the FTX cryptocurrency exchange, founded by Sam Bankman-Fried, has appeared to be the greatest survivor of the recent chaos.
Earlier last month, FTX signed a deal to bailout crypto lending platform BlockFi and announced it was open to considering buying other troubled crypto firms to stem potential credit contagion amid the prolonged bear market.
Bankman-Fried has acted as a lender of last resort during the recent crypto meltdown, with his trading company, Alameda Research, providing a revolving credit facility to Voyager Digital.
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