Circle Pulls The Plug On Going Public

Table of Contents

• Business Combination Terminated
• No Approval From SEC
• Executives Address Termination

Circle and its planned special purpose acquisition company (SPAC) partner Concord have mutually decided not to go public. 

Business Combination Terminated

On Monday, Circle Internet Financial and Concord Acquisition Corp (NYSE:CND) mutually decided to terminate the proposed business combination. 

Speaking on the dissolution of the partnership agreement, Circle CEO Jeremy Allaire stated, 

“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.”

The crypto company and the publicly traded SPAC company first announced their partnership in July 2021. The partnership agreement was amended in February 2022, which set a December 10, 2022, deadline to consummate the business combination. According to the now-nullified agreement, Concord was also liable to a shareholder vote that could extend the deadline till January of next year. 

No Approval From SEC

A SPAC is a company that has no business operations. It is just a “blank check company” created to raise capital through an Initial Public Offering or by merging with another firm. In this case, the Concord Acquisition Company formed this SPAC to merge with Circle and go public.

However, the combination would only have been feasible if the U.S. Securities and Exchange Commission (SEC) had declared the S-4 registration statement effective. Without the SEC’s approval, the two companies could not move forward with their initial business plan. 

Allaire tweeted about the SEC’s role in the situation, 

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

As of now, the boards of directors from both companies have signed off on the termination of the proposed business combination. 

Executives Address Termination

Circle’s CFO, Jeremy Fox-Green, had been anticipating a 2022 date for the listing. Earlier in a July 2022 interview, he had explicitly stated that the process would be completed by the end of the year. 

CEO Allaire has expressed his disappointment over the business proposal not panning out. He also claimed that Circle is still determined to become a public company, focusing heavily on trust and transparency. 

On the other hand, the Chairman of the Concord Acquisition Corp, Bob Diamond, stated 

"Circle plays a key role in the blockchain's disruption of financial services. I remain confident in Circle's regulatory-first approach to building trust and transparency in the financial industry, which has never been more important, and I will continue being an advocate for the company as it continues to grow."

Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.