Circle cancels SPAC Concord deal

USDC stablecoin issuer Circle terminated the deal to go public with the special purpose acquisition company Concord, due to Circle’s incomplete SEC qualification.

Initially announced in July 2021, Circle planned to go public by Concord Acquisition Corp. with a valuation of $4.5B. Later in Feb 2022, the company made a new deal of $9B due to Circle’s improvement of financial and competitive position.

However, on Dec 5, Jeremy Allaire came on Twitter with an announcement of canceling the deal, agreed upon by two parties:

In the Circle’s official press release, the company sheds light on the necessary but unfulfilled terms of the deal:

Under the terms of Concord’s amended and restated certificate of incorporation, Concord has until December 10, 2022 to consummate a business combination. The transaction agreement also states that Concord can seek a shareholder vote to extend that date to January 31, 2023 if the Securities and Exchange Commission (SEC) has declared the S-4 registration statement for the business combination effective. To date, the S-4 registration statement has not been declared effective. 

Circle CEO Jeremy Allaire adds that from his 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 provide trust, transparency, and accountability for major companies in crypto.”

Yet, to end with all kinds of speculation, the company shared “high-level Q3 financial results, with $274M in revenue, $43M in Net Income, and ~$400M on our balance.”

Circle is not the first crypto company to cancel the deal to go public via SPACs. Trading platform eToro and bitcoin miner PrimeBlock terminated the agreements in July and August this year, respectively.

SPACs have become a common way for companies to go public recently. In March, the SEC reported that they accounted for half of all initial public offerings (IPOs) in 2020-21.