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Circle Crypto Firm to Go Public in SPAC Deal Valuing At $4.5 Billion

Circle, a payment company and stablecoin issuer, has announced plans to go public later this year via a merger with Concord Acquisition Corp, a publicly traded special purpose acquisition corporation (SPAC).

The crypto financial services company expects to close the deal in Q4 and value the firm at $4.5 billion.

Circle is best known for co-creating USD Coin (USDC), the US-backed stablecoin. Circle CEO Jeremy Allaire said:

“We just see an incredible opportunity to grow rapidly and grow around the world, and we think that this set of transactions and becoming a public company sets us up to be a trusted platform in this digital currency industry,”

The firm plans to merge with Concord Acquisition Corporation, which former Barclays boss Bob Diamond backs, and the combined entity will be acquired by a new Irish holding firm that will trade on the New York Stock Exchange.

SPACs (special purpose acquisition companies) mean shell companies that raise capital through initial public offerings (IPO) to take private companies public via mergers later.

Circle, a Boston-based startup, said that the deal is expected to fetch $691 million in profits for the combined entity.

Institutional investors such as Daniel Loebb’s Third Point, Fidelity Management & Research Co, Marshall Wace, and accounts advised by ARK Investment Management LLC have come into agreement to offer $415 million in private investment in public equity (PIPE) financing. Last month, Circle raised $440 million in one of the largest funding rounds in cryptocurrency history. These show that Circle will have sufficient funds at its disposal if the merger deal goes through.

Circle’s effort to go public is set to put USDC’s Centre Consortium members on the public markets. USDC stablecoin, which Coinbase jointly administers, has increased its popularity in the stablecoin industry with a circulating supply of almost $26 billion.

Regulators’ Concerns Over Stablecoins

The announcement by Circle comes at a time amid rising concerns by regulators who worry that such digital money pegged to fiat currencies could be used to dupe consumers or enable money laundering.

In April, a federal court in Massachusetts allowed the Internal Revenue Service to seek information from Circle about US taxpayers who carried out transactions of at least $20,000 in crypto assets from 2016 to 2020. However, Circle has not been accused of wrongdoing.

In January, officials in the Biden administration warned stablecoin issuers that several consumers are unaware that the dollar-backed tokens are not federally insured and could lead to losses in their investments.

Regulators also are concerned that stablecoins could be used to sidestep the formal banking system and enable criminals to execute money laundering activities.

In May, Fed Governor Lael Brainard raised concerns over stablecoins by saying such coins introduce the risk that the private issuers default, which could harm consumers and destabilise the financial system.

Crypto Exchange Bakkt Makes Public Trading Debut on NYSE

Shares of Bakkt Holdings Inc started trading on the New York Stock Exchange (NYSE) Monday under the ticker symbol “BKKT”.

Bakkt digital asset marketplace went public via a Special Purpose Acquisition Company (SPAC) on the New York Stock Exchange.

Gavin Michael, the CEO of Bakkt talked about the development and said:

“Today, Bakkt’s vision – to connect the digital economy – reaches new heights, and we’re excited to continue our momentum as a public company. Our platform sits at the intersection of cryptocurrency, rewards, loyalty and payments, and we look forward to accelerating the plan that is already underway: building out a broader partner network, expanding the access and utility of digital assets, and gaining momentum in a space that is continuing to grow.”

The Intercontinental Exchange, the owner of Bakkt exchange and the parent company of the NYSE, stated last Friday, October 15, that Bakkt completed a merger with blank-check company VPC Impact Acquisition Holdings to allow the company to trade on the NYSE.

Bakkt first revealed its plans to go public in January, a deal that considered the firm to be worth about $2 billion.

The Intercontinental Exchange, the NYSE’s parent company, launched Bakkt in 2019 as a cryptocurrency custodian firm by providing holding of Bitcoin in cold storage for investors.

In 2019, Bakkt partnered with Starbucks to allow customers to purchase coffee and other goods with Bitcoin.

Earlier this month, Bakkt partnered with Google on a project that will allow millions of new customers access to digital assets. The firm stated that the project was created to “extend the reach and usability of digital assets to meet rapidly evolving consumer demand and preferences.”

Bakkt customers can use their digital Bakkt debit cards in Google Pay to buy goods online, in stores, and anywhere Google Pay is accepted.

Crypto Firms Going Public

In April, Coinbase set an important milestone when it became the first US crypto firm to take its place on Wall Street, with a historic direct listing on the Nasdaq stock exchange.

Bakkt has joined the list of cryptocurrency startups that are considering listing their shares publicly or are already in the process of actualizing the process.

Such crypto firms are seeking to generate cash for their expansion via alternative listings.

In July, Circle crypto firm announced plans to go public as part of a special purpose acquisition company (SPAC), Concord Acquisition Corp.

In March, eToro Israeli brokerage app disclosed plans to go public via a $10 billion merger with a special purpose acquisition company (SPAC) called FinTech Acquisition Corp, backed by banking entrepreneur Betsy Cohen and SoftBank.

In April, Kraken crypto exchange revealed plans to go public in the second half of 2022 and in May, Ripple also indicated the company is likely to go public. In July 2020, BlockFi crypto lending service also stated intention of going public.

Bitcoin Mining Firm PrimeBlock Looks to Go Public Via $1.5B SPAC Merger

Prime Blockchain Inc, a Bitcoin mining and infrastructure company, is preparing to go public in the U.S. through a special purpose acquisition company (SPAC). The moves underscore the increasing interest in the Bitcoin space.

Prime Blockchain, also popularly known as PrimeBlock Bitcoin mining company, is currently in talks to go public in the U.S. through a merger with special purpose acquisition company 10X Capital Venture Acquisition Corp II.

The SPAC plans to raise more than $150 million through a so-called private investment in public equity or PIPE to support the deal, which is set to take PrimeBlock public and values the combined entity at around $1.5 billion.

The terms of the deal are not yet finalized, which still have a possibility to change, and it is possible that talks could collapse if both parties do not reach a mutual agreement.

The shares of 10X Capital venture rose 11% in early pre-market trading in New York on Thursday, November 18, following the news.

With its Bitcoin mining operations in Canada, Pennsylvania, Tennessee, and North Carolina, PrimeBlock aims to establish itself as “one of the leading carbon-neutral mining and infrastructure companies in North America.”

PrimeBlock is on track to generate annualized revenue of about $100 million. The firm currently mines about 5 BTC per day, operates at a hash rate or mining power of roughly 1 exahash per second (EH/s) and is growing its capacity at 25 megawatts per month.

On November 4, PrimeBlock stated that it hired former Goldman Sachs crypto investment banker Gaurav Budhrani as its new CEO and also hired former tZERO chief legal officer Alan Konevsky to serve as its chief legal officer.

As of November, PrimeBlock announced that it held over 10,300 rigs equipped for Bitcoin mining as well as 2,600 Ether (ETH) miners.

PrimeBlock wants to get to the market quickly and efficiently. After evaluating different paths, the SPAC route is set to allow it to get to the public market the quickest.

The Crypto IPO Race

PrimeBlock’s bid to go public comes at a time when a series of other cryptocurrency mining companies such as Iris Energy Limited, Stronghold Digital Mining Inc, among others, are pushing ahead with similar plans.

Coinbase, the largest U.S. crypto exchange, successfully listed its shares on the Nasdaq in April after receiving regulatory clearances.

Successful market launches from the likes of Coinbase have helped to bring confidence among investors in digital coins.

Furthermore, the U.S. Securities and Exchange Commission (SEC) decision to approve crypto listings (Bitcoin futures ETFs) has served as a major win to the legitimacy of digital coins.

In May, Cipher Mining Inc stated that it agreed to go public through a merger with blank-check firm Good Works Acquisition Corp in a deal valued at $2 billion.

In July, one of North America’s largest Bitcoin mining firms, Core Scientific, announced plans to go public on the Nasdaq through a merger with a blank-check company backed by Blackrock Inc in a deal that values the crypto miner at $4.3 billion.

BTC Mining Firm Griid to be Listed on NYSE, valued at $3.3B

Bitcoin mining company Griid announced that it will merge with Adit EdTech Acquisition Corp through a special purpose acquisition company (SPAC) to be listed on the New York Stock Exchange under the stock code “GRDI”.

After the merger, Griid which is headquartered in Cincinnati and focuses on providing vertical integration will be valued at as high as $3.3 billion.

According to the plan, Griid expects to receive approximately US$246 million in cash from Adit EdTech. The transaction is expected to be completed in the first quarter of next year.

Griid stated that the team has always built a portfolio of Bitcoin mining facilities by purchasing low-cost energy to support the growth of carbon-free energy generation.

Griid expects to mine 637 BTC this year, and the total hash rate of all miners are 187 petahash per second (PH/s). It also stated that it will put 734 megawatts of its 1,300 megawatts of electricity into operation in 2023 for large-scale bitcoin mining, and the cost will be reduced to $6,225 per bitcoin.

By 2024, the company expects to mine 24,348 BTC per year.

The CEO of GRIID Trey Kelly, said that:

“We are building an American infrastructure company with the largest pipeline of committed, carbon-free power among public bitcoin miners at the lowest cost of scaled production. Our team has demonstrated a track record of successful execution over the past three years since starting the company, and we look forward to delivering expansion of capacity through this transaction.”

David Shrier, CEO of Adit EdTech added that:

“Carbon-free mining is the future of Bitcoin.”

In early November, Bitdeer Technologies Holding Co, a Singapore-based Bitcoin mining company controlled by the co-founder of Bitmain, Wu Jihan, announced plans to go public in the United States through a merger with Blue Safari Group Acquisition Corp, with an estimated transaction value of US$4 billion.

Binance Invests $200M in Forbes ahead of SPAC IPO

Binance cryptocurrency exchange, the largest in terms of trading volume worldwide, is investing as much as $200 million in Forbes, through a new venture that will see the media unicorn go public in a merger with Special Purpose Acquisition Company (SPAC) Magnum Opus.

As announced by Forbes, the company has already inked a partnership with Magnum Opus to establish a business combination that will see Forbes go public listing on the New York Stock Exchange under the ticker symbol ‘FRBS’. The public listing deal is expected to close before the end of the first quarter, and the Binance investment will position the trading giant as a key adviser in digital assets and Web3.0 strategy.

“Forbes is committed to demystifying the complexities and providing helpful information about blockchain technologies and all emerging digital assets,” said Mike Federle, CEO, Forbes. “With Binance’s investment in Forbes, we now have the experience, network, and resources of the world’s leading crypto exchange and one of the world’s most successful blockchain innovators. Forbes, already a resource for people interested in the emerging world of digital assets, can become a true leader in the field with their help.”

The new company will pursue more innovative products and services beyond the platform’s regular publications. With a number of product offerings in the works and the terms of the deal, Patrick Hillmann, Chief Communications Officer for Binance and Bill Chin, Head of Binance Labs, the Venture Capital Arm, and Incubator of Binance, will join the Forbes Board of Directors upon the successful closing of the business combination transaction.

The blockchain and emerging Web3.0 innovation are becoming too big to ignore, and Binance’s investment in the proposed company between Forbes and Magnum Opus will help advance the scope of blockchain educating as all hands work toward pushing the industry into its next phase of the adoption cycle.

“As Web 3 and blockchain technologies move forward and the crypto market comes of age we know that media is an essential element to build widespread consumer understanding and education. We look forward to bolstering Forbes’ Digital initiatives, as they evolve into a next-level investment insights platform,” said Changpeng ‘CZ’ Zhao, Founder and CEO, Binance, shunning the earlier brawl he had with one of Forbes’ reports that claimed the trading firms strategically evade tax obligations.

Image source: Shuttstock

Japan’s Coincheck to List on Nasdaq via SPAC Merger with $1.25 Billion Valuation

Coincheck, a major crypto wallet and exchange service in Japan, announced Tuesday that it plans to go public in the U.S. by merging with blank-check firm Thunder Bridge Capital Partners IV Inc.

The merger is scheduled to be completed in the second half of 2022, which will see the combined entity listed on the Nasdaq Global Select Market under the ticker “CNCK.”

The proposed transaction is set to give the combined entity a valuation of about $1.25 billion.

Before expenses and assuming there are no redemptions by shareholders, Thunder Bridge will offer $237 million in cash to the combined company.

Coincheck is 94.2% owned by Japanese online brokerage Monex Group Inc, which will retain all the existing entities at closing, representing ownership of about 82% in the new entity.

Once the closing is done, Gary Simanson, the CEO and President at Thunder Bridge, will become the CEO of the combined company.

Building Innovation Capability for Service Delivery

Founded in 2014 and headquartered in Tokyo, Coincheck is a marketplace for buying and selling cryptocurrencies and an exchange for digital assets like non-fungible tokens. The exchange has about 1.5 million customers.

In January 2018, Coincheck was hacked, and approximately 500 million NEM tokens ($530 million) were stolen. As a result, the digital money heist prompted The Financial Services Agency, Japan’s financial regulator, to tighten regulatory scrutiny. The agency not only ordered Coincheck to improve its security practices but also called for an improvement in the risk management infrastructure of all other crypto exchanges in the country.

In April 2018, Coincheck was acquired by Monex Group for 3.6 billion yen (US 33.4 million). The acquisition was a reaction to the NEM hack, as Coincheck recognized that it needed to strengthen its management system and organization. The move directly responded to Japan’s Financial Services Agency, which requested the exchange to make changes following the January hack — which saw Coincheck compensating the affected users.

During that, Monex Group cited hopes to hold an IPO (initial public offering) of Coincheck shares at a future date. The plan is currently being actualized through the ongoing efforts to list the exchange on the Nasdaq stock exchange through a special purpose acquisition with Thunder Bridge Capital.

Aura FAT SPAC Pulls $115m in IPO, Planning to Merge Crypto Firm

Cayman Islands incorporated Special Purpose Acquisition Company (SPAC) Aura FAT Projects Acquisition Corp has announced its successful Initial Public Offering (IPO) on the Nasdaq Exchange where it raised $115 million.

As announced by the company, the public offering featured as many as 10,000,000 units given at $10.00 per unit. The IPO also saw the firm give out its Class A ordinary share and one redeemable warrant entitling the holder thereof to purchase one Class A ordinary share at a price of $11.50 per share.

As a SPAC, Aura Fat is entitled to raise funds via this method, after which it can then complete a merger with any company within its line of focus. Aura Fat said its approach to merge “will not be limited to a particular industry or geographic region, the company intends to focus its search on new emerging technology companies with an acute growth potential in Southeast Asia and Australasia in sectors such as the Web 3.0, blockchain, cryptocurrency, digital ledger, e-gaming, and other new financial technology and services sectors.”

A Growing Trend in the Blockchain Ecosystem

While SPAC mergers are not so common in the digital currency ecosystem nowadays as it is popular amongst Wall Street startups, a number of crypto-linked platforms have gone public through this means. One of the most prominent examples is the public debut of the Bakkt digital asset platform through a merger with VPC Impact Acquisition last year.

Additionally, startups like Core Scientific and Griid crypto mining firms have also gone public through mergers with different SPAC in July and December 2021 respectively.

eToro Cancels SPAC deal with FinTech Acquisition Corp. V. Company

Social investing network eToro Group announced Tuesday that it has cancelled its planned public listing through a merger with FinTech Acquisition Corp. V. SPAC (special purpose acquisition company).

eToro said that the closing conditions agreed upon by the two firms when the merger was proposed in March last year have not been met.

The two firms announced the proposed merger in March 2021, but further agreements and amendments have failed to meet the closing conditions within the enshrined timeframe.

As a result, the two companies have not been able to complete the transaction deadline by June 30, which prompted the cancellation of their planned merger for an initial public offering (IPO).

When the two parties announced their plan in March last year, eToro stated that it was expecting a valuation of $10.4 billion. On the other hand, FinTech V Chairman Betsy Cohen cited the strengths of eToro as a social trading enterprise outside the US and its multiple income streams. In other words, the merger entity was supposed to create a combined entity worth $10.4 billion, reflecting an implied business value for eToro of an estimated $9.6 billion.

However, the latest meeting between the two firms has brought new revelations. Betsy Cohen, Chairman of Fintech V, talked about the development and said: “The transaction has been rendered impracticable due to circumstances outside of either party’s control.”

eToro CEO Yoni Assia, also commented: “While this may not be the outcome that we hoped for when we started this process, eToro’s underlying business remains healthy, our balance sheet is strong and will continue to balance future growth with profitability.”

Since the two firms mutually agreed upon the decision, there is no termination fee required by either party for payment.

Market Plunge Affecting SPAC Deals

The cancellation of the eToro SPAC deal comes at a time when crypto firms that have been making attempts to go public since the bull market last year have remained stuck in lengthy ups and downs with the US Securities and Exchange Commission (SEC).

Efforts by crypto firms to merge with blank-check companies have been facing increased scrutiny from the accountants at the SEC because crypto-assets raise unique bookkeeping issues.

Besides that, dates for closing multibillion-dollar deals involving crypto firms (such as eToro, Bullish Global, and Circle Internet Financial Limited, among others) going public have been postponed several times and even terminated because of the bad market environment.

SPACs were the hottest way in which Wall Street pursued to hit the public market. However, the craze has declined amid the current market crash together with SEC’s demanding regulations.

Due to the current extreme market conditions, SPACs have been volatile and are on a downward trajectory. This implies that parties involved in SPAC deals are forced to reprice them to reflect the current market conditions. The SEC has also been more cautious about the SPAC process, especially crypto-related deals.

Blockchain Startup W3BCloud to Go Public via SPAC Deal

Blockchain cloud infrastructure service provider W3BCloud is set to go public via a Special Purpose Acquisition Company (SPAC) dubbed the Social Leverage Acquisition Corp I (SLAC).

According to the transaction document, the SLAC vehicle is being sponsored by Social Leverage, a leading early-stage VC. The proposed funds to be raised via the SPAC are pegged at about $100 million.

Going public through a special purpose acquisition company is an alternative route designed for startups looking to raise funds and trade on public bourses.

They are generally a faster-track option for promising startups, provided they have a matching business design with their sponsoring SPACs. Per the proposed merger deal, W3BCloud is on track to be listed on the New York Stock Exchange (NYSE).

W3BCloud is one of the promising startups that hope to be the go-to cloud infrastructure provider for the emerging Web3.0 ecosystems. Currently, the startup ticks the box for providing a quality supply chain and access delivery through its integration of AMD technology. The startup’s core partnership also extends to ConsenSys, which gives it software and protocol insights.

Over the years, the development of Web3.0 focused on cloud infrastructure providers has progressed in a limiting way. This is because crypto-based startups hardly patronize these decentralized cloud providers as preference remains largely for centralized services like Microsoft Azure and Amazon Web Services (AWS).

W3BCloud aims to change the narrative, and it is developing the right data centres, most of which are in the United States. The firm is exploring avenues to bolster its infrastructure with the funds raised and the remaining $345 million cash it has in its trust.

W3BCloud is riding on the strength of both its founders and the expertise of the veterans from Social Leverage. With the clamour for Web3.0 soaring remarkably this period, W3BCloud is hopeful it has a large market potential for its products.

Japan’s Crypto Exchange Coincheck to List on NASDAQ Stock Market in July 2023

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Coincheck, a major crypto exchange in Japan, announced on Friday plans to complete its listing on Nasdaq via a merger with special purpose acquisition company (SPAC) Thunder Bridge Capital Partners IV on July 2, 2023.

Coincheck said the plans to pursue a public stock offering in the US through Nasdaq would give the firm access to the country’s lucrative capital markets.

The exchange said that the move would enable it to expand its crypto asset business by accessing the U.S. capital markets, gaining exposure to global investors, and recruiting talent to realize its growth strategy. Coincheck majority owner Monex Group stated in a U.S. Securities and Exchange Commission (SEC) filing.

Coincheck announced its public-listing ambitions in March of this year. During that time, its merger with Thunder Bridge Capital was valued at $1.25 billion.

SPACs were the hottest way crypto firms use to hit the public market in 2020 and 2021, but the craze has cooled this year amid an overall market downturn along with added Securities and Exchange Commission (SEC) regulations.

Since June this year, the SEC is now more cautious about the overall SPAC process, especially crypto-linked deals, to enhance investor protection.

SPACs overall have been very volatile and on a downward trajectory this year. Crypto companies aiming to go public through SPACs may be running out of time to close the deals, as they appear stuck on the sidelines after failing to find a buyout target.

Circle Internet Financial, the backer of the “stablecoin” USD Coin, has been trying to go public with a SPAC called Concord Acquisition (CND) since July last year.

Also, on the sidelines is a crypto/SPAC deal between eToro Group, an Israel-based online brokerage, and FinTech Acquisition Corp. V (FTCV), a SPAC backed by veteran financier Betsy Cohen. The companies canceled their merger in early July after they couldn’t close the transaction by its June 30 deadline. Failure to gain clearance from the SEC was one of the reasons the deal went bust.