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Benzinga
  • 2 years ago
Dean Skurka, CEO & President of WonderFi, was recently a guest on Benzinga's All-Acess.

WonderFi operates digital asset platforms trusted by over 1.6 million Canadians. It is the largest regulated crypto business in Canada. The company acquired Bitbuy and Coinsquare in 2023 and now has over $1.5 billion in client assets.

Mr. Skurka spoke about the exciting catalysts that are still to come for the industry. Bitcoin has already set a new record high, but many more positive influences lie ahead that should spell good news for a continued bull run.
Transcript
00:00 (upbeat music)
00:02 - All right, Dean, welcome back.
00:06 Good to chat with you again.
00:07 How are you doing?
00:08 - Doing good, Aaron.
00:09 How are you doing, man?
00:10 - I am good.
00:11 Before we hop into it,
00:13 you wanna just give us a brief overview of Wunderphi?
00:16 - Absolutely.
00:17 Wunderphi is publicly traded
00:18 on the Toronto Stock Exchange.
00:20 The ticker is WNDR.
00:22 We are the largest operator
00:25 of cryptocurrency trading platforms in the country.
00:28 We have acquired five of the 11
00:30 regulated crypto trading platforms in Canada
00:32 over the last two years.
00:34 On the back of those acquisitions,
00:35 we have 1.6 million registered accounts
00:38 with over $1.5 billion of client assets
00:41 on the combined platforms
00:42 with crypto trading, crypto staking,
00:45 and a lot of exciting new products on the come.
00:47 - Got it.
00:49 I know one of your brands, Tetra,
00:51 is the first licensed digital asset custodian.
00:54 What services do you provide to institutional clients here
00:57 and how does it differ from what a retail investor
00:59 typically encounters?
01:01 - So Tetra is an example of a company
01:03 that we have invested in.
01:04 We are the single largest shareholder in that business.
01:07 Tetra is a qualified custodian licensed in Canada
01:11 to provide custodial services
01:13 for the digital asset industry.
01:15 It's a business we're really excited about
01:17 in terms of their long-term potential.
01:19 As an investment of Wunderphi's,
01:21 we are working closely with them
01:23 to find additional synergies between our businesses.
01:27 Obviously, as crypto trading platforms primarily,
01:31 our clients maintain significant balances with us
01:34 through our staking services.
01:35 It is another example of how we utilize
01:38 and provide services to our clients
01:40 with respect to the digital assets
01:41 they hold on our platforms.
01:43 And there are many natural synergies between Tetra
01:45 that we look to build out over the coming years.
01:48 - Yeah, it sounds exciting.
01:49 Well, Dean, I know you achieved positive EBITDA in January.
01:53 Are you on track to continue this for the year as a whole?
01:56 - Yeah, we feel really strongly
01:57 about how we've positioned this company.
01:59 We went through a transformative acquisition
02:01 in July of last year
02:03 when we brought together Wunderphi, Coinsquare,
02:05 and Coinsmart, three of the leading brands and businesses
02:08 in the digital asset ecosystem in the country.
02:11 You know, the environment looked a lot different then
02:13 than it does now.
02:14 Our focus was primarily on integrating these businesses,
02:17 identifying cost synergies, operational synergies,
02:20 and really running full steam ahead
02:22 in terms of positioning the company
02:24 how we knew it could look and feel.
02:27 And, you know, on the back of that, naturally,
02:30 in Q4, we saw a ton of excitement enter the space
02:33 through the ETFs,
02:34 the excitement that was building up
02:36 in anticipation of the launch.
02:38 Obviously, now we're on the other side
02:39 of those products being launched to market,
02:41 and all the conversations are around the actual inflows
02:44 that are, you know, in some cases,
02:46 breaking records across ETFs, you know,
02:48 across all sectors, you know, lifetime
02:52 in terms of all of the ETFs that have been launched.
02:55 And so through that, you know,
02:56 you're really seeing a lot of excitement enter the space.
02:59 You're seeing the sentiment and credibility of the space
03:02 improve meaningfully.
03:03 With that, we have seen many Canadians
03:05 start to come back to our platforms,
03:07 buying Bitcoin, Ethereum.
03:09 You know, over the last few weeks,
03:10 we've seen a meaningful run-up
03:12 in the meme coins that we list.
03:13 We've seen really strong volumes there.
03:15 We're seeing signups continue to grow.
03:17 And so, you know, we're in a really strong position
03:19 where we've really demonstrated our abilities
03:22 to identify cost synergies, operational synergies.
03:25 You know, we went from operating
03:26 four crypto trading platforms down to two.
03:29 We've migrated the user basis
03:31 from the other two platforms into Bitbuy.
03:33 Operationally, we're in a really good spot.
03:36 As the markets continue to improve,
03:37 as Bitcoin continues to hit all-time highs,
03:40 our platforms are meaningful beneficiaries of that activity,
03:43 and certainly expect that to reflect well
03:45 on our financials in the year ahead.
03:48 - Yeah, we're certainly seeing a big increase in traffic
03:50 over here on our crypto content.
03:52 It's great to see after, you know,
03:55 I mean, the Bitcoin ETF approval, obviously huge news.
03:58 Speaking of, your platforms, Bitbuy and Coinsquare,
04:02 which you acquired last year,
04:03 have a combined $1.5 billion in assets.
04:08 When do you expect to hit two billion,
04:10 and how do you continue to engender trust in your users?
04:13 - Absolutely.
04:14 You know, these platforms have always been focused
04:16 on transparency and compliance.
04:19 Bitbuy was the first marketplace regulated
04:21 in the Canadian market back in 2021.
04:24 Coinsquare was the first of its kind
04:26 to go through the CERO regulatory process,
04:28 which is the highest bar of regulation in Canada.
04:31 Bitbuy is another example,
04:33 put out proof of reserves dating back to 2019.
04:36 These companies have longstanding track records
04:38 with a clear focus on transparency and compliance,
04:42 and we think that really reflects well
04:43 on the long-term viability of these platforms.
04:46 You know, certainly when you look at the client asset base,
04:49 exceeding 1.5 billion, we think that's a strong reflection
04:52 on the trust that Canadians put into us and our businesses
04:57 with respect to safekeeping their digital assets.
05:00 In terms of growing that base,
05:01 obviously we're incredibly focused
05:03 on bringing more users back to the platforms.
05:08 You know, we have a strong roadmap for additional tokens,
05:10 additional functions and features.
05:13 We think we'll just continue to compound the use
05:16 and activity on our platforms as we move forward.
05:19 And, you know, certainly, you know,
05:21 very much encouraged by the client asset bases
05:24 that we have now, and would expect those numbers
05:26 to grow meaningfully as we continue the year.
05:29 - Got it.
05:30 I know you just announced you partnered with the Tide
05:33 to bring real-time news to your platform.
05:35 Where'd this idea come from and what is the hope here?
05:38 - Yeah, absolutely.
05:39 You know, crypto is a fast-paced industry.
05:41 Things happen very quickly and on a 24-hour cycle.
05:45 And, you know, we think it's really important
05:47 for our users to have access to real-time information
05:52 within the mobile apps that we offer.
05:54 And so for us, information and education are pillars
05:58 and critical feature sets for our users to be more informed
06:02 in a very fast-paced and new industry.
06:05 And so we thought it was really important
06:06 to find a way to bridge that gap
06:08 and provide our users with real-time information
06:12 on the industry as a whole, or the subset of coins
06:16 or segments of the industry that they're focused on.
06:19 You know, the Tide has done a really good job
06:21 at building out these APIs that allow us
06:23 to seamlessly integrate their offering into our platforms.
06:27 And we really look to provide as, you know,
06:31 complete an offering for our Canadian clients as we can.
06:34 And mentioned, you know, earlier, I think education
06:37 and information are key parts of that,
06:39 especially with the newness of this industry.
06:41 You know, embedding that information
06:43 and real-time information flow into these mobile apps,
06:46 we certainly believe will provide a ton of value
06:48 to the Canadian users and allow them
06:51 to make more informed decisions moving forward
06:53 with the digital assets that they're investing in.
06:56 - Got it.
06:57 And then Dean, you generated $8.8 million
07:00 in Solana from an investment.
07:02 What was that investment
07:04 and how much of this will you keep in Solana?
07:06 Will you convert to cash or Bitcoin at some point?
07:08 - Yeah, it's a great question.
07:11 So through the acquisitions, we have acquired, you know,
07:13 some investments that have been made historically
07:15 through many of these companies' life cycles.
07:17 So you think about a company like Coinsquare
07:19 that's been around for 10 years.
07:21 Think about a company like Bitbuy
07:23 that's been around for eight.
07:24 You know, these companies have had opportunities
07:26 come their way and in certain examples have made investments.
07:28 You know, Tetra would be a good example.
07:30 There are also other investments on our balance sheet
07:33 that exist from prior investments made
07:37 over the course of the last 10 years.
07:39 The Solana proceeds are a part of that.
07:41 And, you know, we're certainly excited
07:43 about our abilities to monetize certain investments
07:47 that we have on the balance sheet.
07:49 And we think that reflects really well
07:50 on the trajectory for this business
07:53 and the additional investments
07:55 that we hold on our balance sheet
07:57 and our abilities to monetize them moving forward.
08:00 - Got it.
08:01 How much further do you see this bull market going?
08:03 Where are we in the cycle?
08:05 - Yeah, I think we're further ahead
08:07 than many people would have anticipated, truthfully.
08:09 I think a lot of people look to the having
08:11 and on the other side of the having
08:13 as a likely, you know, as a more likely point in time
08:18 to cross through all time highs.
08:20 I'd say, you know, we're incredibly encouraged
08:23 by the inflows that the ETFs are experiencing.
08:27 You know, they're setting records.
08:28 And in many respects, you know, they're further ahead
08:30 than where many people expected them to be
08:34 by the end of this year.
08:35 You think about what's on the horizon.
08:37 I mentioned the Bitcoin having.
08:38 Certainly a catalyst for more awareness,
08:42 further discussion, further interest in the asset class.
08:45 There's been a ton of conversations
08:46 around the Ethereum ETF.
08:48 Some are expecting it to come as early as May.
08:51 Others expecting it to come closer to the end of the year.
08:54 But there is a growing expectation
08:56 that there will be an Ethereum ETF in market this year.
08:59 And then you think about the broader economics,
09:02 the broader macroeconomic setup
09:04 with the expectation of rate cuts happening
09:06 in the back half of this year as well.
09:08 We think that is a, you know, strong signal to the market,
09:12 you know, in terms of investable income
09:15 and a return to investing in maybe riskier assets
09:18 for a broader audience than there is now.
09:21 We've been really encouraged by the response
09:24 to the trading platforms thus far.
09:26 We think there are many more catalysts
09:28 that will continue to draw interest,
09:31 create more awareness into the sector.
09:34 We think these ETFs have done a meaningful job
09:36 at improving the sentiment for the overall industry,
09:40 providing meaningful credibility,
09:41 whether it's BlackRock or Fidelity.
09:44 You know, these are household names,
09:45 really bringing a lot of credibility to the sector.
09:50 So, you know, we are optimistic.
09:52 We expect there to be volatility, naturally.
09:56 Nothing goes up in a straight line.
09:57 But when we look at the catalysts
09:58 throughout the rest of the year and heading into next year,
10:01 you know, we can't help but think that we are still,
10:04 you know, early days in this cycle.
10:08 - Got it.
10:08 Well, Dean, we're wrapping up on,
10:10 or coming up on time here.
10:12 I'm gonna ask you for a hot take.
10:13 One of the stories of this cycle has been meme coins,
10:16 like you mentioned, especially on Solana,
10:18 in addition to Doge and Shiba Inu.
10:21 We have Pepe, Dog with Hat, and many others.
10:25 What do you think about these, you know,
10:26 meme coins rallying so hard?
10:28 - Yeah, it's interesting.
10:30 You know, I think it's a reflection
10:32 of the industry as a whole.
10:34 You know, there is an element to community.
10:37 There's an element to not taking itself too seriously
10:42 that clearly has a relevant role in this industry.
10:47 You know, you look at the success
10:48 that Dogecoin had in the last cycle,
10:50 you start to see signs with, you know,
10:52 coins like Pepe, Dog with Hat, you know,
10:55 which is crazy just to even say in an interview.
10:58 But, you know, you think about the awareness
11:01 and excitement that these coins drive,
11:03 you know, for platforms like ours,
11:04 that leads to meaningful signups,
11:06 meaningful trading volumes.
11:08 We think it's really important to tap
11:10 into the ecosystem as a whole,
11:13 and we strongly believe that meme coins play a role in that.
11:16 And, you know, we could discuss the fundamentals,
11:21 we could discuss, you know, how or why these things exist,
11:25 but the fundamental reason is there are a ton of people
11:29 that rally behind these projects,
11:32 communities develop around them,
11:34 and we think that is reflective, you know,
11:36 of some of the inherent interest and value
11:39 generated through the industry is that sense of community.
11:42 And so we think they play, you know,
11:44 a role in the broader industry.
11:45 We're happy to support, you know,
11:47 the meme coins that we can,
11:49 and we'll look to continue to offer, you know,
11:51 tokens that we think are relevant to our users.
11:54 And, you know, it's definitely something
11:59 that would be easy to point to
12:02 from an outsider's perspective as a negative,
12:05 but we certainly think it reflects, you know,
12:08 on the power of this industry
12:10 and the ability for the community to come together
12:12 and really rally around certain projects
12:14 and drive the awareness and attention that they do.
12:17 - 100%, it's always exciting seeing
12:19 some of those communities grow as the coins grow.
12:22 Well, Dean, this has been awesome to catch up with you.
12:24 Again, Dean Skarka, the CEO and president of WonderFi.
12:27 Ticker is up there on the screen if you're up in Canada
12:31 or on the OTC markets here in the States.
12:33 Dean, enjoy the rest of your Wednesday.
12:35 Thanks for hopping on.
12:36 Benzing is all access today.
12:38 - Absolutely, always a pleasure.
12:39 Have a great day.
12:40 (upbeat music)
12:43 (upbeat music)
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