There seems to be one route to public markets that will slow down crypto: mergers with SPACs, or special-purpose acquisition companies.
Why it matters: The additional time seen in regulatory scrutiny for crypto SPAC deals coincides with increased regulatory scrutiny for these go-public vehicles, as well as for the crypto sector at large.
Using the numbers: A review of completed SPAC deals from April 2021 to April 2022 shows that the three in the crypto sector took more than 7 months to close, compared to an overall average of 5.6 months for all SPAC deals over the period.
- In the meantime, Three other crypto firms have waited about double the overall average for clearance from the Securities and Exchange Commission: Israeli trading platform operator eToro; stablecoin issuer Circle Internet Financial; and Crypto Exchange Bullish.
- Technically, the clock was reset for Circle because it announced a new deal in February at a higher valuation, albeit with the same SPAC.
Push the news: Bullish on Tuesday filed its sixth amended motion since its proxy on Nov. 1, which does not yet include a record or vote date. The appearance of this data in the filings signals that the deal is getting closer to the finish line.
- The deadline tells you who can vote (shareholders) and a voting date tells you when.
- Bullish has not responded to requests for its regulatory review in time for publication.
Separately, Media company Forbes has just scrapped its plans to go public with a SPAC. Keep in mind that the deal came with a $200 million investment from crypto exchange Binance.
Details: Bullish is a subsidiary of Block.one, the blockchain company behind the infamous EOS ICO and protocol.
- The exchange was first launched in November for select institutions offering trading in Bitcoin, Ether, EOS tokens and USD coins.
- Its liquidity pools allow clients on its platform to participate in fees generated by the exchange through trading and lending via automated market-making and “safe” margin lending, according to Bullish.
- Bullish Exchange does not currently offer services in the US, Canada, China, Japan, Israel and Russia.
flashback: When Bullish closed its SPAC deal with Far Peak Acquisition Corp. in July 2021 announced, this was just a blueprint for an exchange with a high-profile cast of who’s who of Wall Street.
- The CEO of SPAC and future CEO of Post-Deal Bullish is Tom Farley, who was once President of the New York Stock Exchange.
- Investors announced at the time included BlackRock, the world’s largest wealth manager, and Michael Novogratz’s Galaxy Digital.
Our thought bubble: The deals that make it through the SEC might say something about the regulator’s level of comfort with a certain type of crypto company. Example, the controversial payment-for-order-flow practice under review.
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