WonderFi faced a challenging second quarter (Q2) ahead of Robinhood’s planned $250-million CAD acquisition of the Canadian crypto firm, which is expected to finalize in the latter half of the year.
The Toronto-based company reported a net loss of over $9.1 million CAD for the quarter, compared to a nearly $2.5 million loss the previous year. Total revenue also fell from $13.2 million in Q2 of 2024 to $10.8 million this year.
WonderFi attributed these losses primarily to a “challenging” cryptocurrency market. Bitcoin and similar digital assets had peaked in January after the inauguration of US President Donald Trump, who has supported crypto-friendly policies. However, prices dropped soon after, only recovering near the end of Q2, a recovery not reflected in the earnings, according to the company.
The startup also cited closing costs related to the Robinhood deal, and continued investment in Australia and its WonderFi Labs innovation division, as factors in the difficult quarter.
BetaKit reached out to Robinhood for comments on how these earnings might affect the acquisition’s valuation but had not received a response by publication time.
Robinhood announced in May that it would be acquiring WonderFi to expand its Canadian operations, retaining all leadership and employees. WonderFi will continue to provide its products, including its Bitbuy and Coinsquare trading platforms.
WonderFi CEO Dean Skurka told BetaKit that the buyout valued the company at a “significant premium” and “significantly accelerated” its mission. Both WonderFi security holders and the Supreme Court of British Columbia have approved the acquisition through Robinhood’s subsidiary, Wrangler Holdings.
Meanwhile, another US crypto giant, Ripple, is acquiring Toronto payments startup Rail for $200 million USD ($275 million CAD). This deal will integrate Rail’s virtual accounts and infrastructure automation with Ripple, facilitating the use of digital assets without relying on centralized exchanges.
Canadian e-commerce leader Shopify recently partnered with Coinbase and Stripe to support USDC, a stablecoin backed by the US dollar.
The US has advanced quickly in embracing crypto post-Trump inauguration. The GENIUS Act, signed in July, established a regulatory framework for stablecoins, requiring them to maintain a set rate to the US dollar or other “low-risk” assets. The new US SEC chair, Paul Atkins, was a former co-chair of a crypto advocacy group. Trump has also proposed plans for a strategic Bitcoin reserve and introduced currencies named after himself and his wife Melania, raising concerns about conflicts of interest.
Canada has introduced dealer licenses and similar permissions for companies like WonderFi but lags behind its southern neighbor in crypto adoption. This has led figures like BlackBerry co-founder Jim Balsillie to advocate for a stablecoin framework, fearing that Canada could fall behind.
Feature image courtesy WonderFi.