USDC issuer Circle recently declared that its ambition to become a publicly traded company last year through a $9 billion SPAC merger was denied by the United States Securities and Exchange Commission (SEC). Last month, the agreement between Circle and Concord Acquisition was terminated due to market instability following FTX’s shutdown. However, the acquisition corporation is headed by Bob Diamond, a former Barclays CEO.
With a market capitalization of $43.7 billion, according to CoinGecko, Circle’s USDC stands as the second largest stablecoin in the crypto market. According to The Financial Times, Circle asserted that the principal cause of the merger’s collapse was the SEC rather than an unstable economy or investors’ doubts.
The regulatory commission purportedly failed to authorize the S-4 registration—which allows firms to issue new shares. Despite Circle’s hopes for a speedy registration process, they recognized that they were entering uncharted waters as an innovative company in a unique industry. “We knew the SEC registration wouldn’t be quick and simple,” they explained.
Even though it filed with the SEC 15 months prior to the deadline, Circle’s deal expired before they could gain approval from the regulator.
SEC regulations on crypto
Beyond FTX, the SEC has exhibited a reluctance towards the crypto industry in general. While many Bitcoin futures-based exchange-traded funds (ETFs) have been approved, spot crypto ETFs suggested by Grayscale were rejected or postponed.
Despite a history of persistent rejections and an apparent hesitancy to address the growing industry, the commission has been working diligently on its enforcement efforts. On January 12, the SEC released charges against crypto exchange Gemini and crypto broker Genesis for failing to register their Earn program.
The lack of disclosure requirements created a situation where investors were unprotected. We are taking action to ensure that these securities are registered to protect public interestsGary Gensler, SEC Chairperson.