The Vancouver company responsible for the world’s first Bitcoin ATM is cashing in all its chips.
CoinTrader.net — or Bitcoiniacs, as it’s also known by — has been acquired for $1.5 million in a deal that would see 100% of its assets transferred to Newnote Financial Corp.
Newnote president Paul Dickson said his company had plans to create its own Bitcoin exchange but it made more sense to acquire CoinTrader since it was further ahead.
“They already had the established business relationships,” he said.
“They’ve already demonstrated that the current security they’re using with the (IT security firm) Crowdcurity has really proven to be successful for them and they’ve managed to, at this point, not get hacked.”
The Bitcoin market in Canada has also gotten smaller with the February announcement that Calgary’s Cavirtex was shutting down after a number of hacks.
CoinTrader co-founder and chief technology officer Paul Szczesny said the deal made sense for his company due to the four founders’ interest in expanding to other markets.
“We’re not exiting the company,” he said, adding it has yet to be determined in what capacity he will be serving at Newnote.
“It looks like we’ve locked down a payment processor (Vogogo) for the U.S. but we do need the resources to get our regulatory compliance there as well as just a marketing budget and the ability to become visible with a lot of big players down there.”
He said the capital behind Newnote will help the new division with those goals.
Dickson said the expansion south of the border could take place as soon as the summer, but that’s dependent on when Vogogo will be able to deliver the payment processing service.