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Crypto fintech Circle to go public in $4.5 billion Bob Diamond-backed SPAC deal

PUBLISHED ON 2021-07-08 22:54:00 EST Arghyadeep

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Cryptocurrency payments technology company Circle said on Thursday it would go public in a SPAC merger deal valuing at $4.5 billion, at a time when crypto firms are struggling with increased regulatory scrutiny.

Circle will merge with the former Barclays chief Bob Diamond, backed blank-check company Concord Acquisition Corp, and the combined entity will be acquired by a new Irish holding company that will trade on the New York Stock Exchange under the ticker symbol “CRCL.”

The announcement comes months after the U.S. federal court in the District of Massachusetts authorized Internal Revenue Service (IRS) to summon Circle to seek tax-evaders who transacted over $20,000 between 2016 and 2020. However, Circle has not been accused of any wrongdoing.

“Circle was founded with a mission to transform the global economic system through the power of digital currencies and the open internet,” Circle’s co-founder and CEO, Jeremy Allaire, said in a statement.

He added that going public would give “the capital and relationships needed to build a global-scale internet financial services company that can help businesses everywhere to connect into a more open, inclusive and effective global economic system.”

The deal will be supported by institutional investors, including Marshall Wace, Fidelity Management & Research Co, Daniel Loeb’s Third Point and ARK Investment Management through $415 million in PIPE financing at $10 per share, along with up to $276 million of cash held in Concord’s account.

In May, the company raised $440 million in capital from its last funding round, which, when combined with cash in trust and PIPE financing, will provide Circle with over $1.1 billion in gross proceeds upon the close of the transaction.

In 2018, Circle acquired Poloniex, one of the largest cryptocurrency exchanges in the U.S. at the time.

The Boston-based startup is currently the principal operator of USD Coin (USDC), a digital currency whose value is pegged to the U.S. dollar. The crypto has grown over 3400% since early 2021, with more than $25 billion worth of USDC is in circulation, according to the company.

Picture Credit: The Block

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