Coinbase to acquire Brazil’s largest crypto exchange

abdelaziz Fathi

Nasdaq-listed crypto exchange operator Coinbase is reportedly in talks to acquire Brazilian unicorn 2TM Group, the holding company for Latin America’s largest crypto exchange, MercadoBitcoin.com.

Coinbase

Both firms didn’t share the financial details of the acquisition, but 2TM was valued at roughly $2.2 billion in December after the latest $50 million fund-raise. A Coinbase spokesperson declined to comment, said local newspaper O Estado de S.Paulo, which was the first to break out this news. Softbank-backed Brazilian company also declined to comment on the size of the deal, citing confidentiality agreement.

Headed by Daniel Cunha, 2TM is the second Latin American crypto-focused unicorn after Bitso and its subsidiary Mercado Bitcoin counts nearly 3.5 million customers. Per its own statistics, trade volume at the crypto exchange hit $7 billion last year, surpassing its total for the first seven years. The Brazilian firm raised $250 million in two financing rounds in 2021, led by Japan’s SoftBank Group Corp.

Some of 2TM’s investments include a stake in US$PRINTS tokens in the leading NFT curation and collection group Fingerprints DAO, holding some 20,000 ETH worth of NFTs. The crypto firm, founded by Gustavo and Mauricio Chamati, was the first in the world to tokenize public debt assets in 2019.

Brazilians have not missed crypto boom

The startup’s tech team will join Coinbase as part of the deal, and the two firms expect to close the transaction next month. The move comes months after Coinbase laid out its strategy to build a tech hub in Latin America. Following this acquisition, Coinbase’s next steps will be to expand outside of Brazil, hopefully finding acquisitions in Chile, Colombia, Mexico and Argentina.

Brazilians have not missed the cryptocurrency trend and the country has been a hive of activity related to crypto assets. Within Latin America, the nation was the cryptocurrency ringleader both on the regulatory side and on the development side. As it now stands, the country’s financial watchdog, the CVM, bans regulated investment funds from trading in the virtual asset class.

Brazil’s move towards cryptocurrency regulation took a step closer last year after the country’s parliament established a commission to consider the matter. Although their president said he lacks basic knowledge about what Bitcoin actually is, still the country has been the biggest cryptocurrency hub in Latin America and generates the highest turnover in all the region.

Under the previous laws, crypto exchanges and other businesses serving as middlemen can provide the data on their clients voluntarily, but after the new legislation was introduced, they can’t refuse or appeal the authorities’ requests to turn over information.

 

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