Canada’s Coinsquare Preps for TSX IPO

Canada’s Coinsquare is gearing for an IPO on the Toronto Stock Exchange. While most blockchain and crypto companies use RTOs as a shortcut, Coinsquare will fully comply with the rules for regular IPOs.

Top Canadian crypto exchange Coinsquare plans to list on the Toronto Stock Exchange (TSX), looking to raise about $120 million in an initial public offering (IPO) scheduled for September.

The company wants to expand overseas, aiming to challenge Coinbase, with CEO Cole Diamond commenting on the future plans as follows:

“The United States and the U.K. market are next. We believe that we will be a strong competitor to Coinbase and other exchanges in the U.S. by the end of the year.”

Unlike many local crypto companies, Coinsquare wants to demonstrate solidity by targeting the TSX rather than the TSX Venture Exchange. Both are part of TSX Group, but TSX is a senior market while the TSX Venture Exchange is mostly a venue for startups and emerging companies.

The several startups that picked the junior platform conducted their IPOs via reverse takeovers (RTOs), which do not require an in-depth review by the securities commission. For this reason, regular IPOs and listings on the TSX attract more professional investors looking for solid fundamentals and less volatility.

However, given that blockchain and cryptocurrencies are recent phenomena, regulators have yet to draft a list of clear instructions for startups in this space. Thus, RTOs continue to be the choice for most of the emerging blockchain companies. The negative side is that RTOs open the door to many poor projects and startups going public.

Diamond said that Coinsquare would never consider an RTO.

“We believe that there are a tremendous amount of low-quality deals going public,” he said.

 “We’re racing, but racing to do it right. We’re going to take the old-school route as an IPO to the Toronto Stock Exchange,” Diamond added.

In addition, Coinsquare is raising $40.5 million from an investor group led by Canaccord Genuity and Cormark Securities.