Preparing to enter stock Exchange via a SPAC in July 2021, a revised agreement in 2022, Circle had to give up its project barely four days before its end while the issuer of the 2nd stablecoin on the market would accuse the SEC for this failure. If at the time, the fintech company had seemed to take things with a grain of salt, today it would not have hesitated to point the responsibility for the DRY in that case. In effect, Circle reportedly said he expected the DRY have a “thorough and rigorous review process“, but the regulator failed to process his “S-4 record” before the expiration of his PSPC agreement despite enough time.
What Circle criticizes the SEC for its proposed IPO
The issuer of USDC stablecoin, Circle, would have blamed the Securities and Exchange Commission (SEC) of the United States for the failure of its plan to introduce stock Exchange according to a Financial Times report. The transmitter of USDC said the financial regulator did not approve its S-4 registration before its special purpose acquisition company agreement expired (SPAC) of $9 billion. S-4 registration allows companies to offer new actions after approval by the DRY. A person familiar with the matter said that Circle had wasted a lot of time between when he intended to “go public” in 2021 and when the deal expired in 2022.
The source added that the collapse of FTX probably further exacerbated the situation in November 2022, as it highlighted how some crypto companies were mismanaged and making “impossible for anyone to endorse anything. Circle expected the DRY has a “thorough and rigorous review process” given the rapid growth of its business during the period. Circle would have said:we didn’t expect the SEC registration process to be quick and easy“. Circle CEOJeremy Allaire added that “this type of review is necessary to ultimately ensure trust, transparency and accountability for major crypto companies”.
According to the Financial Times, Circle also reportedly said that neither the state of the markets nor fearful investors were a factor in abandoning his SPAC deal.
The business combination could not be completed prior to the expiration of the transaction agreement because the SEC had not yet declared our S-4 filing “effective”.
Quote from Circle shared by the Financial Times
Circle denies blaming the SEC
Soon after the publication of FinancialTimesa spokesperson for Circle denied reports that she blames the Securities and Exchange Commission (DRY) of the United States for the failure of its proposed $9 billion IPO in December.
The spokesperson now claims that the company does not hold the SEC responsible termination of its merger agreement. (Indeed, Circle’s listing on the New York Stock Exchange (NYSE) was conditioned on its ability to merge with Concord through a special purpose acquisition company, also known as SPAC).
Circle does not and does not blame the DRY for anything related to the mutual termination of our agreement of PSPC merger with Concord, and any statement to the contrary is incorrect.”
Jeremy Allaireco-founder and CEO of Circlefurther stated that the “SEC has been thorough and thorough in understanding our business and many new aspects of this industry“.
SEC steps up scrutiny of crypto companies
The SEC seems like a nightmare companies crypto. Its boss, Gary Gensler, has been particularly under fire since the resounding fall of FTX. A separate report from wall street journal said the financial regulator had stepped up its scrutiny of companies in cryptography who wish go public over the past year.
Of the crypto companies like Circle, alongside others like eTorowould not have succeeded in obtaining SEC approval. The committee headed by Gary Gensler asked another crypto company repeated questions, Galaxy Digital, which intends to go public on the Nasdaq. According to the report, the rigorous examination of the regulator focuses on the financial information of the company, the legal risks and the impact of market disruption.
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