Fintech Acquisition Corp, a special purpose acquisition company (SPAC), has announced the termination of a planned acquisition of eToro, a cryptocurrency exchange platform based in Israel. The acquisition deal was halted after a mutual agreement.
eToro halts acquisition deal
The chairman of Fintech V, Betsy Cohen, said that eToro was “disappointed” that the acquisition deal had not gone according to plan. However, the exchange maintained that it still had strong momentum and positive growth performance. Cohen further added that the deal had been halted because of circumstances beyond the control of the parties involved.
The deal between eToro and Fintech V was announced in 2021. When the SPAC merger was agreed upon, eToro had a valuation of $10 billion. However, the cryptocurrency exchange could have faced financial challenges because of the bearish trend across the market.
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eToro is currently considering funding to keep its operations going. The exchange is looking at a private funding round of $800 million to $1 billion. With this funding round, eToro’s valuation will increase to $5 billion.
Fintech V is a company that trades on the Nasdaq cryptocurrency exchange. The company’s main purpose is to create mergers with private companies that want to become publicly-listed companies. The company has around $150 million worth of cash held in trust.
The co-founder and CEO of the eToro exchange, Yoni Assia, said that the exchange’s balance sheet was strong and would continue to grow while achieving profitability. Assia said the exchange finalized the second quarter of this year with around 2.7 million funded accounts. This is a 12% increase compared to the end of 2021. This shows that despite the ongoing bear market, the exchange had maintained the customer acquisition and retention rates.
Crypto exchanges face financial trouble
Cryptocurrency exchanges have been facing financial troubles over the past few weeks following the bear market in the crypto space. The bear market, coupled with the collapse of projects such as Terra LUNA, has affected several companies in the space.
Voyager Digital, one of the sector’s top exchanges, is among the centralized exchanges that have filed for bankruptcy amid ongoing financial difficulties. Voyager filed for bankruptcy after Three Arrows Capital defaulted on a loan of over $600 million. 3AC has also filed for bankruptcy in New York.
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