In Post-FTX World, Circle Kills SPAC Plans

The planned SPAC merger had been awaiting regulatory approval from the SEC

article-image

Jeremy Allaire Circle CEO | World Economic Forum

share

In a “mutual decision,” Circle and its planned special purpose acquisition company (SPAC) partner Concord have pulled the plug on plans to go public, the companies said Monday. 

The SEC had not granted Circle and Concord approval to move forward. The approval process, while lengthy, is essential, according to Circle CEO Jeremy Allaire. Concord tapped its SPAC division, Concord Acquisition Corp., for the deal. 

“From my perspective, I believe that the SEC has been rigorous and thorough in understanding our business and many novel aspects of this industry,” Allaire wrote in a tweet Monday. “This kind of review is necessary to ultimately provide trust, transparency and accountability for major companies in crypto.”

Circle, which first revealed its SPAC ambitions in July 2021, delayed its plans twice — before canceling them all together. The most recent deferral came just last month, when the stablecoin issuer said the deal would be pushed to January 2023, according to an SEC filing

“We are disappointed the proposed transaction timed out, however, becoming a public company remains part of Circle’s core strategy to enhance trust and transparency, which has never been more important,” Allaire said in a statement.

Circle is now profitable, closing the third quarter of 2023 with a net income of $43 million — the “best financial position” the company has ever been in, Allaire said. 

The delay comes as stablecoins continue to attract interest from regulators, although the recent blow-up of offshore exchange FTX has dominated the conversation around crypto rules in recent weeks. 

“The recent market disruptions, while costly for many, were not systemic events,” Jon Cunliffe, chair of the CPMI and deputy governor for financial stability at the Bank of England, said in a July statement, presumably referring to the depegging of algorithmic stablecoin UST in May.

“Such events could become systemic in the future, especially given the strong growth in these markets and the increasing linkages between crypto assets and with traditional finance,” Cunliffe added.

Showing proof of reserves — likely to be a key component of any stablecoin legislation that is passed in the US — is a transparency move Circle has leaned into. The issuer released its first monthly report for USDC reserve assets in 2018.

Learn more: What Is Proof of Reserves and Can It Build Back Trust?

“As policy and regulatory requirements evolve and as better reporting opportunities arise, we intend to adjust our approach and continue to enhance transparency into our operations to give the market even more confidence,” the company said at the time.


Start your day with top crypto insights from David Canellis and Katherine Ross. Subscribe to the Empire newsletter.

The Lightspeed newsletter is all things Solana, in your inbox, every day. Subscribe to daily Solana news from Jack Kubinec and Jeff Albus.

Tags

Upcoming Events

Salt Lake City, UT

MON - TUES, OCT. 7 - 8, 2023

Blockworks and Bankless in collaboration with buidlbox are excited to announce the second installment of the Permissionless Hackathon – taking place October 7-8 in Salt Lake City, Utah. We’ve partnered with buidlbox to bring together the brightest minds in crypto for […]

Salt Lake City, UT

WED - FRI, OCTOBER 9 - 11, 2024

Pack your bags, anon — we’re heading west! Join us in the beautiful Salt Lake City for the third installment of Permissionless. Come for the alpha, stay for the fresh air. Permissionless III promises unforgettable panels, killer networking opportunities, and mountains […]

recent research

Research Report Cover Vertex.jpg

Research

The proliferation of new perp DEXs has led to fragmented liquidity across various DEXs and chains. Vertex, known for its vertically-integrated DEX that includes spot, perpetual, and integrated money markets, is now tackling cross-chain liquidity fragmentation through horizontal integration with the launch of new Edge instances. Vertex's integrated offerings and cross-margined account structure amplify the benefits of new instances: native cross-chain spot trading, optimized cross-chain basis trading, consistent interest rates, reduced bridging friction, and more.

article-image

Plus, a dive into crypto’s ever-expanding unicorn club

article-image

Also, tokenization continues to grab headlines and one bitcoin miner stock soars Tuesday after inking a big deal

article-image

Fifteen million daily failed transactions disappeared from Solana

article-image

FTX debtors will pay the IRS $200M, with an outstanding lower priority claim of $685M

article-image

I’ve come to the realization that more attention is needed to create and sculpt the digital spaces where we live

article-image

The NYSE went down yesterday after a glitch caused a string of erroneous trades. Does DeFi fix this?