Circle criticizes the Securities and Exchange Commission for not being listed on Wall Street. The stablecoin group reportedly abandoned plans to go public last December through a settlement with a SPAC, not because the cryptocurrency market crashed, but because the SEC stepped in to stop the program by not giving it the green light. “The business combination could not be completed prior to the expiration of the settlement agreement because the SEC had not yet declared our S-4 filing effective,” the group said. The S-4 filing is the filing of the document with the securities regulator by which companies apply for permission to offer new shares.
“We did not expect the SEC filing process to be quick and easy. We are a new company in a new industry. It is necessary, appropriate and reasonable for the SEC to have a thorough and rigorous review process, especially given the rapid expansion and development of Circle’s business in the 15 months between our initial registration in August 2021 and the closing of the proposed merger last month,” the company wrote in a press release.
Circle: The Crypto Enemy of the SEC?
Circle operates the second largest stablecoin in the world and in July 2021 signed an integration agreement with the blank check vehicle created by banker Bob Diamond, just as the cryptocurrency market was at its peak. However, 2022 was a dramatic year for the entire industry, with a series of major crypto operators chain failures, before the crash of stablecoin TerraUSD. At the same time, SPACs also fell after the Federal Reserve raised interest rates, which discouraged combinations with companies looking to go public.
Circle’s $9 billion plan fell through when the SPAC expired as the SEC’s bureaucracy burned indefinitely between Circle’s initial filing and December 2022. According to rumors from people familiar with the matter, there was “regulatory confusion over the interaction of the USA with cryptocurrencies”. companies that prevailed through most of 2021.”
Then, last November, the FTX standard happened and at that time it became very difficult for the regulator to be able to approve anything that was of interest to the crypto world. This is also confirmed by the fact that the SEC did not give the go-ahead for Grayscale’s transformation from a crypto investment fund to an ETF listed on the Bitcoin website. Among others, the Gary Gensler-led body recently sued Genesis exchange, which has filed for Chapter 11 bankruptcy in the US, and cryptocurrency exchange Gemini, over certain crypto assets that would be considered security offerings and therefore would require registration. at SEC. This demonstrates the belligerent climate that has now developed between stock exchange authority and the crypto industry.