Coinsquare Announces Closing of Strategic Investment by Mogo

Rhea-AI Summary

Mogo Inc (NASDAQ:MOGO) has successfully completed a strategic investment in Coinsquare, acquiring a 19.99% ownership stake for $27.4 million and the issuance of 2,807,577 common shares. This investment allows Mogo the potential to increase its stake to 43%. The partnership aims to enhance cryptocurrency trading capabilities for Mogo's clients and expand access for more Canadians. Coinsquare continues to pursue IIROC membership to become a regulated marketplace, which is critical for its growth in the evolving digital asset landscape.

Positive

• Mogo acquired a 19.99% stake in Coinsquare for $27.4 million.
• Potential to increase stake up to 43%, strengthening partnership.
• Expected improvements in cryptocurrency trading capabilities for Mogo's clients.

Negative

• None.

Coinsquare Ltd (“Coinsquare”), Canada’s leading digital asset trading platform, is pleased to announce the closing of the previously announced strategic investment in Coinsquare by Mogo Inc. (NASDAQ:MOGO) (TSX:MOGO), a digital payments and financial technology company.

Pursuant to the strategic investment agreement (the “Investment”) between Coinsquare, Mogo and certain shareholders of Coinsquare (the “Vendors”), Mogo has acquired a 19.99% ownership interest in Coinsquare for aggregate consideration consisting of a cash payment of $27.4 million and the issuance of 2,807,577 common shares of Mogo to Coinsquare and the Vendors. The Investment also includes rights for Mogo to increase its ownership to up to 43% at a fixed price, through purchases of shares from current shareholders and the exercise of warrants under certain conditions. Mogo’s strategic investment builds on a multi-year relationship between the two companies. Coinsquare acts as the trading platform for MogoCrypto, a service Mogo launched in 2018 to allow its members an easy and convenient way to buy and sell bitcoin.

Commenting on the closing, Stacey Hoisak, CEO of Coinsquare said: “Mogo’s investment in Coinsquare will drive platform developments that will enable us to better serve our current clients and widen access to digital asset investment opportunities for many more Canadians. We look forward to continuing to provide Mogo’s expansive client base with a trusted, secure and compliant platform to manage their digital asset portfolios.”

“With the global crypto market cap now at over $2 trillion, doubling in just a few months, it’s clear that crypto is not only the fastest-growing asset class but an increasingly important one that investors want access to. Coinsquare has built a premier crypto platform and a leading market position in Canada,” said David Feller, CEO of Mogo. “By deepening our relationship with Coinsquare and leveraging their crypto capabilities alongside Mogo’s broader digital wallet capabilities including our recently announced transaction with Moka, we believe Mogo is extremely well positioned to provide Canadians with a leading next-gen wealth offering.”

Jason Theofilos, Board Member of Coinsquare, commented: “We’re excited to deepen our relationship with Canada’s leading fintech company. By leveraging Mogo’s digital wallet capabilities and base of more than one million members, combined with our deep crypto trading capabilities, we see significant opportunities to accelerate the growth of both businesses.”

Coinsquare continues to actively work with the Canadian regulators to achieve IIROC membership and regulated marketplace status. On March 29, the Joint CSA/IIROC Staff Notice 21-329 – Guidance for Crypto-Asset Trading Platforms: Compliance with Regulatory Requirements was released which envisages crypto asset platforms becoming fully regulated. Coinsquare’s subsidiary, Coinsquare Capital Markets Ltd., filed its application to operate as a marketplace and dealer in November of 2020.

About Coinsquare

Since 2014 Coinsquare has provided digital asset traders a proprietary trading platform engineered to deliver a robust, secure, and intelligent interface for trading Bitcoin, Ethereum, Litecoin and other digital assets. Coinsquare’s products and services also include Coinsquare Wealth for qualified individuals and institutions. Our Wealth service provides customers with an OTC desk featuring institutional grade liquidity, dedicated account management from one of our experienced Account Directors, and a suite of other investment products focused on digital assets. For more information and terms and conditions visit https://coinsquare.com/

About Mogo

Mogo is empowering its more than one million members with simple digital solutions to help them get in control of their financial health. Through the Mogo app, consumers can access a digital spending account with Mogo Visa* Platinum Prepaid Card featuring automatic carbon offsetting, easily buy and sell bitcoin, and get free monthly credit score monitoring, ID fraud protection, and personal loans. Mogo’s wholly-owned subsidiary, Carta Worldwide, also offers a digital payments platform that powers the next-generation card programs from innovative fintech companies in Europe, North America and APAC. To learn more, please visit mogo.ca or download the mobile app (iOS or Android).

Forward-Looking Statements

This news release may contain “forward-looking statements” within the meaning of applicable securities legislation, including statements regarding future acquisitions of Coinsquare shares by Mogo and continued growth of the cryptocurrency market. Forward-looking statements are necessarily based upon a number of estimates and assumptions that, while considered reasonable by management at the time of preparation, are inherently subject to significant business, economic and competitive uncertainties and contingencies, and may prove to be incorrect. Forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause actual financial results, performance or achievements to be materially different from the estimated future results, performance or achievements expressed or implied by those forward-looking statements and the forward-looking statements are not guarantees of future performance. Coinsquare’s growth, its ability to expand into new products and markets and its expectations for its future financial performance are subject to a number of conditions, many of which are outside of Coinsquare’s control. Except as required by law, Coinsquare disclaims any obligation to update or revise any forward-looking statements, whether as a result of new information, events or otherwise.

View source version on businesswire.com: https://www.businesswire.com/news/home/20210416005293/en/

FAQ

What recent investment did Mogo make in Coinsquare?

Mogo acquired a 19.99% ownership interest in Coinsquare for $27.4 million and 2,807,577 common shares.

How much can Mogo potentially increase its stake in Coinsquare?

Mogo can increase its ownership in Coinsquare up to 43% under certain conditions.

What is the significance of Mogo's investment in Coinsquare?

The investment is expected to enhance Mogo's digital asset services and improve trading capabilities for its clients.

What is the current status of Coinsquare's regulatory efforts?

Coinsquare is actively working towards achieving IIROC membership and regulated marketplace status.

What does Mogo plan to achieve with its investment in Coinsquare?

Mogo aims to leverage Coinsquare's capabilities to provide a leading digital wealth offering to Canadians.