Circle blames the SEC for the collapse of a $9 billion SPAC

[ad_1]

Stablecoin Circle says the SEC is responsible for its failure to go public.

The company told the Financial Times (FT) in an interview published on Wednesday (January 25th) that the $9 billion deal was called off last year not because of the tough cryptocurrency market, but because the Securities and Exchange Commission (SEC) had not approved it.

PYMNTS has contacted Circle and the SEC for comment, but has not yet received a response.

As PYMNTS reported, Circle canceled plans to go public through a Special Purpose Acquisition Company (SPAC) merger in December.

The announcement came at a time when activity surrounding once-popular SPACs had cooled considerably, and shortly after the FTX exchange implosed.

However, Circle told the FT that neither the crypto market nor investors’ attitude towards SPACs was the cause of the deal’s demise.

The business combination could not be completed before the expiration of the transaction agreement because the SEC had not yet declared our S-4 registration effective, the company said, referring to the registration document. that companies must file to obtain SEC approval to offer new stock. .

Still, the company said it recognizes the need for rigorous scrutiny by the SEC.

We didn’t expect the SEC filing process to be quick and easy, Circle said. Were a new company in a new industry.”

Circle isn’t alone in facing intense scrutiny from the SEC. As reported here on Tuesday (January 24), a Wall Street Journal (WSJ) report found that at least two other companies Bullish Global and eToro Group failed to obtain commission approval for their listings.

The WSJ report cites unnamed sources who say the SEC has no plans to block these companies from going public, though crypto firms say the pace of regulator scrutiny has slowed the process.

And while the company said the broader crypto market was not the cause of the deal’s demise, a source told the FT that FTX’s collapse in my mind made it impossible for anyone to endorse anything.”

The months that followed saw a few high-profile actions by the SEC involving crypto companies, including the agency’s civil complaint against FTX founder Sam Bankman-Fried, who alleges his company had been fraudulent since its inception. created in 2019.

And earlier this month, the SEC accused Genesis Global Capital and Gemini Trust Company of offering unregistered securities.

PYMNTS Data: Why Consumers Are Trying Digital Wallets

A PYMNTS study, New Payments Options: Why Consumers Are Trying Digital Wallets, reveals that 52% of US consumers tried a new payment method in 2022, and many chose to try digital wallets for the first time.

[ad_2]