Robinhood is looking to assemble a merry band of Canadian crypto traders.
What happened: U.S. online brokerage Robinhood has made a play to enter the Canadian market, inking a deal to acquire Toronto-based crypto company WonderFi for $250 million.
- If the deal closes, all WonderFi-owned employees will join Robinhood Crypto, but operations at WonderFi exchanges like Bitbuy and Coinsquare will go unchanged (for now, at least).
Catch-up: WonderFi has navigated drama — like boardroom blow-ups, the kidnapping of its CEO, and the force of nature that is Kevin O’Leary — to attain over 1.7 million registered users and $2.1 billion in client assets. This was achieved mainly through acquiring other crypto firms.
Why it matters: In buying WonderFi, Robinhood will also acquire the company’s valuable regulatory licences, which could jumpstart a broader encroachment into Canada. Robinhood Crypto’s general manager even called Canada “the next step for international expansion.”
- Last year, Robinhood opened its first Canadian office in Toronto: an infrastructure engineering hub that now employs 140 people.
Big picture: The move will put Wealthsimple, more or less Robinhood’s Canadian equivalent, in direct competition with the company for the first time, as it also has a crypto exchange platform. While Robinhood is still far away from securities trading in Canada, if it ever gets there, its entrance into the country could put pressure on Wealthsimple.—QH