USDC issuer Circle has outlined plans for a proposed initial public offering (IPO), but a new report indicates the stablecoin company’s previous attempt to go public was dogged by regulatory questions from the U.S. Securities and Exchange Commission (SEC) .
In July 2021, Circle initially announced plans to go public through a merger with Concord Acquisition Corp, a publicly traded special purpose acquisition company (SPAC).
Those plans were canceled in December 2022.
Barron took advantage of public records requests and secured 155 pages of documents from the SEC related to that failed SPAC merger. This data shows that the SEC Circle has asked about the risks related to USDC’s classification as a security.
USDC is the second largest stablecoin by market capitalization and aims for a 1:1 peg to the US dollar.
The SEC also reportedly questioned Circle about whether it could be classified as an “investment company” rather than an “operating company,” which could mean more restrictions on its business activities.
The SEC and Circle corresponded for nearly a year over the documents related to the attempted SPAC.
Securities attorney Xavier Kowalski told Barron’s that the documents show Circle appears to have answered the SEC’s questions and put itself on track to become a publicly traded company by October 2022, two months before the proposed merger fell through.
In January, Circle announced it was launching its second attempt to go public, this time through a traditional initial public offering.
Circle and Coinbase co-founded USDC in 2018 and jointly managed the asset through the Center Consortium until last year.
Last August, Circle CEO Jeremy Allaire announced that his company would bring all of USDC’s governance and operational responsibilities in-house to streamline management of the stablecoin.
Coinbase said at the time it would buy an equity stake in Circle. The largest American crypto exchange became a publicly traded company in April 2021.
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