Coinsetter acquires CAVIRTEX
New York-based Bitcoin exchange Coinsetter announced Wednesday its acquisition of CAVIRTEX, a Canadian Bitcoin exchange.
CAVIRTEX had announced in February that it would cease operations in March due to security issues.
In a company blog post on the acquisition, Coinsetter said that CAVIRTEX reopened its doors to customers Wednesday and resumed trading under Coinsetter’s leadership. The two exchanges will operate under their own names, sharing technology, capital, management, and banking access to maximize value to traders. CAVIRTEX will move to use Coinsetter’s technology stack and incorporate its advanced security standards and practices. Previous account holders at CAVIRTEX and Coinsetter will continue to be able to use their existing login credentials at the same websites to obtain access to their accounts.
Coinsetter said it will relocate CAVIRTEX headquarters, previously based in Calgary, to Toronto.
The deal was completed through a negotiated agreement with CAVIRTEX voting shareholders. Coinsetter CEO Jaron Lukasiewicz and CTO Marshall Swatt have assumed the roles of CEO and CTO of CAVIRTEX, respectively.
Reuters reported that according to sources, the acquisition was valued at $2 million, marking the first merger deal in the Bitcoin exchange market.
Lukasiewicz told Reuters that Swatt reached out to CAVIRTEX “just kind of on a hunch and it evolved from there.”
“We saw a lot of assets in Cavirtex not only in terms of entering the Canadian market, but being a leader in it,” said Lukasiewicz. “But probably the most important asset was the exchange’s compliance-approved domestic bank account in Canada.”
Lukasiewicz told Reuters that banking relationships had become hard to attain for Bitcoin companies and “bitcoin exchanges have become the connecting point between the traditional banking institutions and the bitcoin ecosystem.”
VentureBeat reported that the deal is well timed, as laws in Canadian regarding Bitcoin have recently been clarified. In January, Canada passed a law that instituted reporting criteria for digital currency businesses. The move discouraged some businesses, which then shut down, but appeared to invigorate others. But the regulations will not immediately go into effect for Bitcoin businesses, and there will be a chance for these firms to express their opinion on how digital currency businesses should be regulated, said VentureBeat.
The news outlet said that to stem issues relating to CAVIRTEX’s previous fraud problems, Coinsetter will be overhauling the Canadian exchange’s entire infrastructure.
“We will also be adding order books in new currencies on both Cavirtex and Coinsetter,” said Lukasiewicz. “The integrated trading liquidity and security of both exchanges will provide an unmatchable global Bitcoin platform to Bitcoin users everywhere.”
Images courtesy of Coinsetter.