Stablecoin group Circle has abandoned plans to go public in a $9 billion deal through a blank checks firm chaired by former Barclays CEO Bob Diamond.
The partnership, which was first tied during the July 2021 cryptocurrency bull market and expanded earlier this year, evaluation $7.65 billion to $9 billion. Diamond’s U.S.-listed special-purpose acquisition company Circle and Concord Acquisition said Monday they had “mutually agreed” to end the merger.
The Circle trading collapse follows the failure of digital asset exchange FTX, hitting a crypto industry already under pressure from rising interest rates and a series of bankruptcies of major players.
Concord had until December 10th to close the deal to acquire Circle.
“We are disappointed that the proposed transaction has timed out. It’s become important.” Diamond added, “I will continue to be an advocate for the company as it continues to grow.”
Circle’s USD Coin is the second largest stablecoin in the cryptocurrency market, falling from over $55 billion in June 2022 after investors exited the cryptocurrency market, according to Circle data. The valuation has reached about $43 billion.
Stablecoins play a key role in connecting traditional and crypto markets, mostly tracking the value of major currencies like the dollar. Crypto traders use them like cash between bets. Stablecoin operators typically earn interest on the token’s underlying traditional asset, increasing revenue as circulation increases. The group said on Monday that he had net income of $43 million in the third quarter of this year and income and interest income of $274 million.
This year, many publicly traded companies in the cryptocurrency industry are under a lot of pressure. Shares of US-listed exchange Coinbase are down about 80% in 2022, while shares of Mike Novogratz’s Galaxy Digital Investment Group are down 81% this year.
Broader market turmoil has hit other major players in the crypto industry, including broker Genesis, which suspended withdrawals from its lending scheme last month, and lending platform BlockFi, which went bankrupt following FTX.
Days after FTX went bankrupt, Circle said it had minimal exposure to FTX and sister trading firm Alameda Research. In early 2021, the company made his $10 million equity investment in FTX and his $60 million investment in FTX US.