This Stablecoin Provider Is Shelving Plans to List on the Stock Market

The issuer of the USDC stablecoin, Circle, is no longer going public as earlier planned. The company has terminated a merger with Concord Acquisition Corp, a special purpose acquisition company (SPAC). The two companies have not provided the reasons behind the recent move.

Circle halts plan to go public

Circle and Concord Acquisition Corp have announced an end to their business partnership. The board of the two firms approved the termination of the merger that was meant to see Circle becoming a public company.

The CEO of Circle, Jeremy Allaire, confirmed the decision saying, “While disappointing that we did not complete SEC qualification in time, we remain focused on building a long-term public company.” Allaire further stressed that Circle was still committed to becoming a public company to boost trust and transparency.

1/ Some big @circle news. This morning, we announced the termination of our proposed deSPAC transaction. While disappointing that we did not complete SEC qualification in time, we remain focused on building a long-term public company. https://t.co/R0XYfCFD54

— Jeremy Allaire (@jerallaire) December 5, 2022

The two companies have not provided in-depth details as to why they have halted plans to make Circle publicly listed. Circle and Concord first announced plans for a SPAC merger in July 2021. The companies later renegotiated the deal in February 2022 after the valuation of the stablecoin issuer increased from $4.5 billion to $9 billion.

Allaire has also added that the company has continued to perform well since the merger was announced. The firm had already reported strong momentum during the third quarter of 2022 after receiving an estimated $274 million in total revenues and a net income of $43 million.

“While there are a lot of challenges within the crypto and blockchain industry, I am of the very firm conviction that we are going to decisively leave the speculative value phase and enter the utility value phase, and stablecoins such as USDC will play a huge part,” Allaire added.

USDC is the second-largest stablecoin by market capitalization. The stablecoin has a market capitalization of around $43 billion. The stablecoin’s market cap has declined this year amid increased outflows from the crypto market as prices crashed.

After the FTX exchange filed for bankruptcy last month, Circle said it had minimal exposure to FTX and its sister company, Alameda Research. Early last year, Circle invested in FTX with a $100M equity investment while also investing $600,000 in FTX US.

Crypto companies halt plans to go public amid an intense bear market

Circle is not the only notable player in the crypto industry that has halted plans to go public. eToro, one of the largest social trading platforms, canceled plans to go public in July this year. PrimeBlock, one of the leading Bitcoin mining companies, also terminated its plans to become a publicly listed company in August.

SPACs have become a popular way for companies to seek public listings. In March, the US Securities and Exchange Commission (SEC) reported that SPACs accounted for half of all the initial public offerings (IPOs) made between 2020 and 2021.

The SEC also said it was proposing special disclosure requirements for these companies, and there would be increased regulatory scrutiny before they go public.

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