When Q3 achieved profitability, Circle announced the termination of the SPAC merger and listing plan
This article comes fromFortune, Original Author: JEFF JOHN ROBERTS
Odaily Translator | Nian Yin Si Tang
Odaily Translator | Nian Yin Si Tang
In July 2021, Circle announced that it would go public through a SPAC (a process that involves merging with a shell company that raises funds to acquire a private company). The deal, which would have made Circle one of the few publicly traded cryptocurrency companies, has been repeatedly delayed. Now, that deal has fallen through.
The deal between Circle and Concord Acquisition Corp. was originally concluded in July 2021, with a target valuation of $4.5 billion, it is understood. In February, Circle announced it had amended the terms of its deal with Concord, valuing Concord at $9 billion and initially slated to close on June 10. However, the deadline on June 7 was pushed back by six months to December 10. And given a series of events last year that saw the price of crypto assets plummet and Coinbase’s share price plummet, it’s unlikely the company will command a similar valuation at this time.
Posted by Circle on Monday morningannouncementannouncement
, with Concord Acquisition Corp., a potential partner in the SPAC, describing the development as "mutual termination." The chief executives of both companies issued complementary statements suggesting the decision to end the long-running deal was amicable. Termination of the proposed business combination has been approved by the boards of directors of Concord and Circle.
Circle CEO Jeremy Allaire said he was "disappointed with the delays" in the deal, referring to the fact that the U.S. SEC has yet to approve Circle's merger with Concord. Circle’s announcement noted that the terms of the deal gave Concord “consummation of the business combination” by Dec. 10, but that deadline now appears moot given Monday’s announcement and lack of SEC approval.
The lack of action by the US SEC on the Circle transaction coincides with the tenure of cryptocurrency industry opponent and current chairman Gary Gensler, and comes as regulators scrutinize the cryptocurrency industry more broadly. The catastrophic crash of cryptocurrency exchange FTX.
Allaire also noted in the statement that "becoming a public company remains part of Circle's core strategy to enhance trust and transparency," but he did not provide further details on how or when Circle will go public. Allaire also tweeted that the US SEC has been "rigorous and thorough" in understanding the company's business: "From my perspective, I believe the US SEC is rigorous in understanding our business and the many new areas of this industry. And thorough. This scrutiny is necessary to ultimately provide trust, transparency, and accountability to major companies in the crypto space.”
Circle remains committed to becoming a public company in the long term, Allaire said. Circle is profitable in the third quarter of 2022, with gross and reserve interest income of $274 million and net income of $43 million. Circle ended the third quarter with nearly $400 million in unrestricted cash. It came after the company posted a series of quarterly losses, partly due to writedowns related to its acquisition of the Poloniex exchange.“Despite the many challenges facing the cryptocurrency and blockchain industry, I firmly believe that we will move decisively from the speculative value phase to the practical value phase, and stablecoins such as USDC will play a huge role. We are investing, building, and developing a huge and a thriving ecosystem of companies and projects working to advance our vision of an open, more inclusive and efficient global financial system.” Allaire on Twitter。
wrote
Circle's new earnings come amid a series of interest rate hikes by central banks -- a situation that benefits the company because stablecoin issuers make money from the pools of reserves they hold that fund digital assets they issue. Anchored.
