Instead, the Pooper at the party was almost certainly the Securities and Exchange Commission. Following the collapse of crypto exchange FTX in November, the regulator’s vigilance against cryptocurrencies has already increased, and now he has reached DEFCON 1. So trying to match a cryptocurrency company to his SPAC is another financial invention not loved by the SEC.
Obstacles to such a listing may seem unfair — Circle is more transparent than some stablecoin operators — but in the end, the SEC wanted to avoid giving the industry an implied legitimacy. And it is right to stop the flood of cryptocurrencies into public markets. A suspension of such a list would provide more breathing space for governments to decide how they wish to regulate cryptocurrencies.
When asked to explain why the $9 billion SPAC merger was scrapped, Circle management was scrupulously polite about the SEC and vague about the “inertia” about getting the deal approved. i was just mentioning it. (Since the company is still aiming to go public, it’s not advisable to deny regulators in that situation.) But nearly 18 months after the deal was first announced, the SEC issued a merger prospectus. I am not hiding my refusal to declare
With the SEC’s increased emphasis on the quality of SPAC disclosures, deals that previously took just six months from announcement to completion could remain unresolved for a year or more.
Cryptocurrency companies aren’t the only ones experiencing regulatory drag, but Trump’s SPAC digital world acquisition company is too, and the SEC’s lukewarm response to such deals is clear.
Bullish, a Gibraltar-based cryptocurrency exchange backed by tech investor Peter Thiel, is also trying to list via SPAC from July 2021. Bullish has been audited by Deloitte and has said it has no exposure to FTX or related entities, leaving his checks blank. Farr his partner, Peak Acquisition Corporation, is headed by Tom Farley, former president of the New York Stock Exchange. But even after countless amendments to the merger prospectus, the SEC was still not satisfied, saying that the $6.7 billion deal would go into effect on December 31 if it didn’t close by his December 31st date. ends on the day
Bitcoin mining firm Bitdia Technologies Holding’s $4 billion SPAC deal has also been on hold for over a year, with trading platforms Apifiny Group Inc. and eToro Group ending their respective SPAC mergers in July. .
The SEC is unaware of the difficulties faced by SPACs. First, blank check companies typically only have about two years to complete a transaction.
Second, transactions agreed upon over a year ago may no longer represent fair value. Circle he re-opened in February at a significantly higher valuation, but most startups are now worth less than they were during all of 2021’s bubbles.
Third, investors who support SPAC transactions through private investment in public equity (PIPE) transactions can seek refunds if the transaction is not completed promptly. His PIPE of $300 million bullish he expired in July.
Banks, in particular, have declined a role in SPAC transactions as the SEC seeks to hold them legally liable. Not surprisingly, cryptocurrency trading has also been affected. Goldman Sachs Group Inc. stepped down as financial adviser to Diamond’s Concord Acquisition Corporation in early November, according to the prospectus, without giving a reason. Similarly, Far Peak’s underwriter, Wells Fargo & Co., resigned in May and waived $15 million in fees, according to the prospectus.
If the banks waive responsibility for the cypto SPAC merger, that would be more reason for the SEC to deny them the green light.
Bloomberg Opinion Details:
Palantir couldn’t find a pattern in the SPAC debacle: Chris Bryant
FTX benefited from suspension of VC distrust: Burgess and Hughes
The FTX crypto bubble really sucks: Merryn Somerset Webb
This column does not necessarily reflect the opinions of the editorial board or Bloomberg LP and its owners.
Chris Bryant is a Bloomberg Opinion columnist covering European industrial companies. Previously, he was a reporter for the Financial Times.
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