US SEC Ruined Circle’s Move to Go Public Via SPAC Partnership
The digital asset payment firm, Circle, has revealed that it has planned to go public with its $9 billion deal with SPAC, which failed due to the securities regulator’s guidelines. According to the statement from the parent company of the USDC stablecoins, the US Securities and Exchange Commission (SEC) did not sign off on the deal.
Delayed Registration
According to a Twitter post by Circle’s CEO, Jeremy Allaire disclosed that the crypto firm failed to complete the SEC’s qualification requirement in time. According to Circle, it had planned to go public in July 2021 after reaching a valuation of $4.5 billion before it doubled last February.
This comes after the firm negotiated a new deal with the Special Purpose Acquisition Company (SPAC) Concord Acquisition Corporation, which reflects an improvement in its balance sheet. Furthermore, reports revealed that Circle stated that the abandonment of its SPAC deal was not because of the market turbulence or investors’ fears.
The firm added that the business deal was not sealed before the expiration of the trade agreement because the regulator was yet to declare Circle’s S-4 registration effective. Circle noted that the company never anticipated a quick registration process with the SEC due to previous experiences.
However, the crypto firm admitted that it is appropriate and necessary for the regulator to put a rigorous review procedure in place. It is worth noting that Circle initially announced the cancellation of its plan to go public on December 5 after both parties’ boards agreed to the termination of the agreement.
Curiously, this termination is among the numerous high-profile crypto firms withdrawing from their plans to go public through SPAC. Examples are that of the crypto trading platform eToro and Bitcoin mining firm, PrimeBlock in July and August 2022, respectively.
Circle Announces New USDC Protocol
With the massive loss of funds last year from crypto exploits and hacks, cross-chain has been identified as the main factor for the reoccurrence of attacks on digital asset platforms. The new Circle protocol is one-of-a-kind cross-chain bridge developers say is cost-effective and more efficient.
The importance of cross-chain bridges is that they facilitate the movement of crypto tokens across blockchains and play a significant role in all transactions in the crypto space. With the introduction of the Cross-Chain Transfer Protocol (CCTP), USDC transfer across blockchains will become more seamless, fast, and affordable.
Meanwhile, the CCTP is a permissionless tool designed as an on-chain protocol capable of burning a specific amount of USDC from the source chain and minting the same token on the destination platform.
Additionally, developers can integrate the protocol into their applications to provide users with a seamless transfer of USDC stablecoins across the blockchains. With its multiple use case, Circle believes the CCTP would allow users to move USDC to any chains within the DeFi ecosystem.
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