Circle and Concord announced the termination of their special purpose acquisition company agreement.
Both entities agreed to shutter the deal as the stablecoin issuer could not meet regulator requirements in time.
The deal was meant to allow Circle to expand its business operations and raise more capital.
Circle, which issues crypto’s second-largest stablecoin currency USD Coin (USDC), will not complete its agreement with special purpose acquisition company agreement (SPAC) Concord Acquisition. The official statement affirming the decision from both entities was released on Monday.
Circle CEO Jeremy Allaire said that the deal fell through as the firm “did not complete SEC qualification in time”. Allaire stressed that the USDC issuer remained focused on taking the company public.
Concord Acquisition is a publicly traded company on the New York Stock Exchange (NYSE) under the ticker CND. SPAC companies like Concord are created solely for agreeing to mergers or acquisitions by other financial special providers. The SPAC raised $276 million during its initial public offering back in 2020.
Circle announced the SPAC emerge in July 2021 for the first time. The terms of the agreement were would transition Allaire’s stablecoin issuer from a private entity to a public firm with tradable stock on regulated equity exchanges like the NYSE.
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.
Circle reports $43 million in net income for Q3
Allaire’s thread on the SPAC deal included numbers from the firm;’s Q3 financial report. The CEO tweeted that his company boasted over $400 million on its balance sheet, generated around $274 million in revenue, and made $43 million in net income.
Data from the company showed that Circle completed 4.1 billion USDC redemptions between November 25 and December 1. USDC’s circulation supply dropped by some $800 million as well.
USDC was the second-largest stablecoin in the crypto market with a $43.3 billion market cap at press time, CoinMarketCap showed. Allaire’s company planned to launch a Euro-backed stablecoin with Solana in 2023. The firm also has a payments agreement with Apple for USDC.