Circle blames SEC for failed plan to go public

Stablecoin issuer Circle has accused the U.S. Securities and Exchange Commission (SEC) of failing its listing plans. financial times Reported on January 25th.

The issuer of USDC said financial regulators failed to approve the S-4 registration before the expiration of its $9 billion Special Purpose Acquisition Company (SPAC) contract. S-4 registration allows a company to issue new shares with SEC approval.

A person familiar with the matter speaks FT Circle lost a lot of time between trying to go public in 2021 and closing the deal in 2022. During this period, cryptocurrency companies have had to deal with heightened regulatory uncertainty in the United States.

The source added that the collapse of FTX likely made things worse in November 2022.

Circle originally announced plans to go public in July 2021 at a valuation of $4.5 billion.

Circle expects ‘thorough’ and ‘rigorous’ vetting process

According to FT report, Circle expected the SEC to have a “thorough and rigorous review process” given the business’s rapid growth during that period. The Circle reportedly said:

“I never expected the SEC registration process to be so quick and easy.”

Circle CEO Jeremy Allaire previously shared a similar view.Aller murmured On Dec. 5, 2022, he said the SEC had been “rigorous and thorough” in understanding many new aspects of his company’s business and the crypto industry. Aller added:

“This kind of review is necessary to ultimately provide trust, transparency and accountability to the crypto giants.”

The Circle also poured cold water on the idea that the deal was derailed due to volatile market conditions, with cryptocurrencies trading at record lows in 2022.

SEC Increases Scrutiny of Crypto Companies

A separate Wall Street Journal report said financial regulators have stepped up scrutiny of cryptocurrency companies seeking to go public over the past year.

Crypto companies like Circle, alongside others like eToro and Bullish, reportedly Failed to get SEC approval. The committee, led by Gary Gensler, repeatedly asked another cryptocurrency company, Galaxy Digital, about to list on the Nasdaq.

The rigorous regulatory scrutiny will focus on the company’s financial disclosures, legal risks, and the impact of market turmoil, according to the report.

Posted In: United States, Regulation

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