Is the SEC to blame for Circle's aborted IPO?

Circle, the USDC issuer, had to cancel its IPO, according to a report blaming the U.S. regulator, the SEC.

Circle, the issuer of USDC, had to cancel its IPO, according to a report blaming the U.S. regulator, the SEC.

The failed IPO of Circle shocked the crypto space. The reason given at the time was the breakup of a deal with SPAC company Concord Acquisition Corp, which would have been a key piece of Circle's debut. But rumors started to swirl. Some suspected investor pressure or the overall weak market conditions.

According to the official statement, the parties involved had to terminate the deal. The SEC's green light never came before the S-4 registration transaction agreement expired. That clearance was important because Circle would have been barred from issuing shares otherwise.

But as the Financial Times has learned from industry sources, the U.S. Securities and Exchange Commission (SEC) allegedly deliberately blocked the gathering. The anonymous source accuses the agency of taking "too long" on purpose.

Reason: FTX?

As the financial outlet further writes, the collapse of the now-bankrupt crypto exchange FTX also contributed to the SEC's decision. Shortly after the bankruptcy, the regulator said it was "impossible" to issue a license, according to the company.

In general, the SEC has been tougher on crypto firms in recent months. For example, the Securities and Exchange Commission has long been involved in approving a Bitcoin spot ETF. Moreover, the U.S. authority has weighed in on the Gemini vs Genesis dispute and has sued both for selling unregistered securities.

This does not mean Circle's IPO plans are off the table. As Circle CEO Jeremy Allaire said in a press release, the transition to a publicly traded company remains "part of the core strategy." However, it's not yet clear when the USDC issuer will actually hit the trading floor.