00:00 Hey, welcome, man. It's Michael Murray with Benzinga joined today by Dean Skirka, the
00:06 CEO of Wunderphi Technologies. Dean, thank you very much for taking the time. How are
00:10 you today?
00:11 Doing great. Thanks for having me.
00:12 Pleasure to have you here. Let's get started with a quick overview of your company. What
00:16 exactly does Wunderphi Technologies do?
00:18 Yeah, thanks. Wunderphi owns, invests and operates various platforms across the digital
00:24 asset ecosystem. We have been primarily focused on consolidating regulated crypto trading
00:30 platforms that operate in Canada. Over the last year and a half, we have acquired Bitbuy,
00:36 Coinberry, Coinsquare and Coinsmart. And on the back of these acquisitions, Wunderphi
00:41 has the largest platform for digital asset trading in Canada, with over 1.6 million registered
00:48 Canadian accounts and over $17 billion of lifetime value traded across the platforms.
00:54 Fantastic. Now, with your company investing across the digital asset ecosystem, what do
00:58 you see in crypto and digital assets? What's so promising about this industry and what
01:02 would you say makes it so disruptive too?
01:05 Yeah, absolutely. I mean, there's a lot to like about the industry. Over the last 10
01:09 years, we've seen tremendous growth in terms of relative interest, education and understanding
01:16 about the technologies. And of course, from a crypto exchange perspective, volumes and
01:21 users onboarding. And so we've seen tremendous growth in this industry thus far. We believe
01:26 the technologies represent meaningful opportunities to disrupt financial services industry and
01:33 to provide a fair and level playing field for the majority of the globe to invest in
01:37 these opportunities in a transparent, reliable manner where prior to they would have limited
01:44 access, if any, to some of these products and offerings in market.
01:47 Terrific. Now, Dean, a barrier to wide adoption that crypto has traditionally faced is the
01:52 ability to actually pay for products. Can you tell us more about your crypto payment
01:56 business and how you guys are growing that?
01:58 Yeah, absolutely. Historically, I believe the main area of focus for people in the digital
02:03 asset industry has been around trade and speculation. More recently, we've seen an emerging trend
02:09 around payments. And I think a big contributor to that is education and understanding around
02:15 digital assets, the emergence of stable coins. And really, from a smart pay perspective,
02:23 which is the subsidiary that we own and operate, that is a B2B crypto to fiat payment processor.
02:29 We believe one of the biggest barriers for growth that has prohibited payments from being
02:35 predominant in the past, the way they are today, is the understanding that the end user
02:40 may have around the abilities of holding digital assets and whether or not they actually want
02:45 to do that as part of their broader strategy. Smart pay really simplifies this process by
02:50 allowing merchants to accept digital assets for the goods and services that they offer.
02:55 But what smart pay does is it liquidates the digital assets once they are received and
03:02 ensures that the merchant only receives fiat and the dollar amount that they would expect
03:09 to have otherwise received less the processing fees. And so in a world where merchants are
03:15 not in the business of speculating on digital assets or setting up their own wallets or
03:20 infrastructure to warehouse these digital assets, smart pay is really providing a pivotal
03:24 role, integral role in the overall process towards more adoption and the broader use
03:30 of digital assets for payments by really simplifying that process and ensuring that the end user
03:36 only receives the fiat that they would have otherwise had received less the processing
03:41 fees. We believe crypto payments represents a very meaningful opportunity for long term
03:46 growth. And we're very excited that through the acquisitions we've completed, we have
03:50 a strong foothold in that segment through smart pay.
03:54 Got it. Now, Dean, since combining forces with Coinsquare and Coinsmart, which you mentioned
03:58 earlier, you've been working to consolidate Bitbuy and Coinsquare together. How is that
04:02 progressing so far?
04:03 It's been progressing really well. You know, part of acquiring four regulated cryptocurrency
04:08 trading platforms, you know, obviously entailed the integration and identifying and extracting
04:15 those synergies from an operating and cost perspective to really consolidate our efforts
04:19 around fewer platforms. And so dating back to August of this year, Wonderfi announced
04:26 that it successfully migrated the users from Coinberry, a platform that we acquired in
04:31 July of last year, into Bitbuy, therefore migrating those users and winding down the
04:37 Coinberry business. Through that process, Wonderfi was able to extract meaningful operational
04:43 and cost synergies and continue down that path towards consolidation of these platforms
04:48 through the migration and wind down of the Coinsmart trading business. So today, whereas
04:53 we have acquired four crypto trading platforms over the last year and a half, we operate
04:58 two today and Bitbuy has all of the users from Coinberry and Coinsmart in it. We believe
05:05 there are significant benefits to the users beyond the benefits from an operational and
05:10 cost synergy perspective to the business, including more functionality, a better platform
05:17 with staking available on it, as one example, with an order book and with other functionality
05:25 that both Coinberry and Coinsmart didn't have. And so as we continue along this path towards
05:31 integrating these platforms and consolidating our efforts, the next stage of this will be
05:36 integrating the Bitbuy trading platform inside the Coinsquare regulated entity that today
05:42 is the first and only of its kind in the Canadian market.
05:45 Dean, speaking more broadly to what trends are on the horizon for crypto in your estimation?
05:50 Yeah, it's a great question. Certainly regulation has been one of the main trends over the last
05:56 few years. And you think back to 2022 and some of the issues that took place in the
06:01 U.S. market, we're really looking to the reaction from the U.S. regulators in terms of establishing
06:06 that framework and allowing the industry to grow through stabilized and intact regulation.
06:13 Beyond that, we've seen growing trends through the adjacent products and services that exist
06:19 on exchanges globally. Staking would be one example, which allows users that hold proof
06:24 of stake assets on exchanges to stake them and therefore earn rewards based on the yields
06:32 that are being offered to do so. And so that's an example of a trend that we believe will
06:38 continue to grow in terms of its overall size within the Bitbuy business. As we consolidate
06:44 all of these trading platforms, all of those users get the benefit of now being able to
06:48 stake their digital assets. And we believe staking represents one of the trends within
06:54 the industry that we're really excited and focused on. Beyond that, we're looking at
07:00 ways in which we can utilize our regulatory positioning in Canada to continue to roll
07:05 out the products and services that we believe Canadian participants are looking for. We
07:10 believe two of those primary products and services that can provide meaningful value
07:17 to both Wonderfi and its users would be margin and derivatives trading. You think about the
07:22 growing industry for digital assets. Globally, when we look at it, margin and derivatives
07:28 are two products that have generated significant traction and value to participants globally.
07:35 Being a regulated business, we are looking at the ways in which we can work with our
07:40 regulators to balance product innovation and consumer protection to bring these products
07:45 into the Canadian market under a regulated entity and ensuring that Canadian participants
07:51 are safeguarded with using these products and services through a platform like Bitbuy
07:55 or Coinsquare and really look to broaden the products and services that we offer through
08:00 that process. Amazing. Dean, we can't thank you enough for the insights that you've given
08:04 us not only about Wonderfi and what you're up to, but also about the industry at large.
08:08 Dean Skirka, CEO of Wonderfi Technologies. Thank you so much for joining us here today.
08:12 Thank you for having me.
08:19 channel.
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