Dean Skurka laughs when he’s asked whether he’s planning to acquire any more crypto platforms after his company, WonderFi, closed its high-profile triple merger with rivals CoinSmart and Coinsquare.

“I hope we get to catch our breath,” he said. “We think that we’re in a position where we can really just focus on the business.”

It’s understandable that Skurka would like a moment to breathe, given what he’s been through over the past two years. As interim CEO of WonderFi and before that as president of WonderFi-owned crypto platform Bitbuy, Skurka has lived the crypto industry maxim that a month in the sector is the equivalent of a year in any other.

Since going public on the Neo Exchange in a reverse takeover in the summer of 2021, WonderFi and the companies it now owns have gone through a total overhaul of their business models, and have survived a regulatory crackdown, wild crypto-market volatility, the collapse of “strategic investor” FTX and public acrimony between the three companies that ultimately ended up merging. 

With that merger complete, WonderFi has become one of Canada’s largest registered domestic crypto-trading businesses, with more than 1.6 million Canadian crypto investors across four registered platforms, which it is in the process of consolidating into the Bitbuy and Coinsquare brands.

Daniel Fuke, a partner at Fasken who advises clients in the blockchain industry, said the closure of the triple merger means the Ontario Securities Commission’s goal of taming the sector and bringing it into compliance has been successful, if imperfect. Many in the industry opted to work with the regulators rather than fight them, he said, after their 2021 announcement that crypto platforms must either start the registration process or exit the country. That meant a heavier compliance burden for WonderFi and its peers, with the trade-off of professionalization, consolidation and membership in the historically conservative Canadian Investment Regulatory Organization.

“The OSC was able to convince the industry that their way was the best path forward,” he said. “We’ve got now a sophisticated, fully regulated … real potential market leader here.”

When WonderFi first went public, it had intended to focus on building a platform that would make it easy for the average person to access DeFi, an umbrella term for a fast growing suite of blockchain-based services that recreate elements of the financial system. As crypto boomed, the value of the company’s stock soared 73 per cent between its public-markets debut on Aug. 31 and its peak in mid-November 2021.

“From there, the story started to shift,” Skurka said. With valuable stock with which it could make acquisitions, WonderFi started rolling up Canadian crypto-trading platforms that had registered with securities regulators, starting with Bitbuy and moving on to Coinberry.

The good times didn’t last. By May 12, 2022, when the collapse of the stablecoin Terra sparked a crypto price crash and broad contagion in the sector, WonderFi’s stock had already lost 95 per cent of its value from its peak.

The November 2022 implosion of Bahamas-based crypto-trading giant FTX deepened WonderFi’s woes. The company issued a statement saying it did not have any exposure to FTX, its sister trading firm Alameda or FTX’s exchange token, FTT, but it did have other complex links to the platform—Alameda led WonderFi’s US$5.6-million funding round in August 2021, and WonderFi had promoted Bankman-Fried’s role as a “strategic” investor.

FTX’s collapse hit centralized crypto-trading platforms like Bitbuy and Coinberry hard. Concerned about contagion and wondering what other platforms might turn out to be fraudulent or secretly insolvent, crypto holders pulled their assets off such platforms at a record rate, moving them to self-hosted wallets and decentralized exchanges instead. Trading volumes have yet to recover.

With crypto platforms suddenly trading at a bargain, experts predicted the sector would consolidate. After some messy back-and-forth—including a lawsuit threat from CoinSmart after Coinsquare backed out of a deal to acquire it—WonderFi once again leaned on the value of its stock, announcing it would acquire both companies in an all-share deal in April.

In a signal of how dire things had become for the sector, days before announcing the merger, WonderFi had released financial statements that included a warning from its auditor noting “the existence of a material uncertainty that may cast significant doubt about the Company’s ability to continue as a going concern”—in other words, to stay in business without running out of cash. 

With the merger complete, Skurka said that warning no longer applies. “The combined company is incredibly positioned, well funded, has significant capital,” he said. “I think we’re certainly in a position to weather any downturns that may extend any further than we’d hoped them to.”

Combining three companies—and managing three sets of egos—is no easy feat. “Things that can seem trivial, like [brand] names, suddenly become emotionally driven conversations,” Skurka said.

Skurka said a steering committee selected him as permanent CEO because of his steadfast support of the deal, industry experience and relationships. Former Coinsquare and CoinSmart CEOs Martin Piszel and Justin Hartzman will stay on as advisors to the company, and Hartzman has a board seat, but neither will remain in a staff role, he said.

“Difficult decisions had to be made,” Skurka said. “I think it’s difficult for any CEO to be a part of an M&A and not be the CEO on the other side, but remain inside the company on a day-to-day basis.”

WonderFi earned a rebuke from the Competition Bureau for saying in media interviews that the agency had approved the merger, which Skurka told The Globe and Mail was a miscommunication. In fact, the agency did not review the deal and WonderFi did not notify it, as its size of the deal was below the reporting requirement, he told The Globe. (WonderFi did not respond to a request for comment on the matter, which took place after the interview with Skurka.)

In an email to The Logic, Competition Bureau spokesperson John Power said he was unable to confirm whether the agency has investigated or will investigate the merger. The Competition Bureau may review mergers or acquisitions of any size, but does not approve or reject them, he said—that authority belongs to the Competition Tribunal. 

The slip-up may prompt the Competition Bureau to ask WonderFi for some additional information, said Keldon Bester, a fellow at the Centre for International Governance Innovation and executive director of the Canadian Anti-Monopoly Project. He said it can be challenging for the agency to get up to speed on new technologies like cryptocurrency, but that he hopes it will start paying attention to the sector proactively: “I think the earlier that authorities … start paying attention to markets, the better.”

Skurka, for his part, is hoping to spend less time on regulatory issues and more time on revenue diversification to help smooth out the volatility of crypto trading. He said WonderFi is eventually hoping to offer stock trading and sports betting and has high hopes for CoinSmart’s crypto-payments software SmartPay, which the company recently announced is seeing revenue growth of 10 per cent month over month.

“We think we’ve consolidated the industry from a crypto-trading-platform perspective pretty well,” Skurka said. “Now we start focusing on diversifying our revenues.”